Kevin Harrington, managing director of a global prepaid industry organisation, argues that prepaid payment schemes could be the answer to boosting dwindling sales on the High Street

Kevin Harrington, managing director of a global prepaid industry organisation, argues that prepaid payment schemes could be the answer to boosting dwindling sales on the High Street

The High Street has been struggling for a long time. Kevin Harrington, managing director of Global Prepaid Exchange, said this year alone the percentage of empty shops has risen from 12 to 14.5%*.

In some areas more than one in three shops are now boarded up. “The economy is obviously making the situation worse, but no one can deny that this is part of a trend,” he said. “Supermarkets were first blamed, then out-of-town shopping centres and now the rise in buying online.

“What local and High Street retailers need is a new line in products that drive customers to their shops, products that, like a pint of milk, consumers will not want to travel far for: a line of products that has high margins but very low risks. It would be even better if these products didn’t take up much space and gave smaller independent retailers the chance to sell world leading and compelling brands in their shops; brands that met the exacting needs of the 21st century consumer. Sounds like an impossible dream doesn’t it?” Harrington suggested. He said that, in fact this year the prepaid industry will be introducing products that do all this, and more.

Understanding the sales potential

“Prepaid is not currently always understood as a term,” he explained. “When it comes to payment methods, most people think in terms of paying now (cash) or later (credit). Prepaid is simply ‘pay before’. It started with postage stamps and really took off with prepay mobile phones and is set to revolutionise retail this year, as a result of innovations in technology and partnerships with major brands. A recent survey by Stored Value Solutions found that 59% of people had both given and received a gift card in the last 12 months.

“Prepaid already covers a very broad range of products,” Harrington added. “However innovations during 2011 will make prepaid a compelling payment option in terms of safety and convenience. Payment can now be made through smart phones and even watches.”

He claimed: “The explosion of prepaid is a massive opportunity for all retailers, not just convenience stores. They can now, at very low or no risk, carry a range of new products with great margins that will drive new customers into their shops. For example, many people worry about putting in their credit card details when buying online: there are now products that instead allow the customer to pay in a shop and in return receive a code that can be used to complete the online purchase. This is particularly suitable for children when they want to access online games and their parents don’t want them to access their credit cards. Games are also a good example of a compelling activity where consumers won’t want to wait until the next big out-of-town shop; they’ll want to go their nearest supplier immediately.”

Positively influencing buying behaviour

He told RetailTechnology.com readers: “By the end of this year each of the different types of retailer could have a whole ‘mall’ of prepaid products that fit with the rest of their product range, but only take up a fraction of the space. The contents of the mall is only limited by your imagination as prepaid suppliers work on securing deals with world leading brands to offer completely new ways for their products to be sold by you.

The Stored Value Solutions Survey found that 47% of people made a special trip to the shops to buy the gift card. However he added: “Prepaid can influence your customers’ behaviour in other ways. Facebook have done this successfully with the recent launch of Facebook Deals, which encourages users to ‘check-in’ to venues using their smartphone to access a range of discounts and incentives. Consumers rushed to tell their friends about it and the social media world was sent buzzing with excitement. Starbucks gave away 30,000 cups of coffee as word spread on launch day. With the new technology you don’t have to be a major brand for this to work for you.

“This revolution in payment can be compared to the start of the internet, when it took us a while to understand how we could exploit it,” Harrington concluded. “Local and High Street retailers don’t have the luxury of time. Prepaid providers such as epay and Stored Value Solutions should be contacted now to see what they can do for you.”