Glenbrook’s Bryan Derman is in Las Vegas for the 2010 Prepaid Expo.
Clearly, you know that an industry has “arrived” when it is able to attract (and afford!) a former U.S. President to speak at its annual convention. Well, any lingering doubts about the importance and sustainability of the prepaid card industry were probably addressed by yesterday’s appearance of former U.S. President Bill Clinton at the 2010 Prepaid Expo USA in Las Vegas. Mr. Clinton showed a surprising knowledge of the developments and issues in the prepaid arena and provided useful frameworks for thinking about how the business fits in the broader context of governmental and macroeconomic policy.
The former president began by laying out the two great questions that politicians struggle with and offered a perspective about them that I have frequently heard from friends who have served in government: 1. Government typically spend too much of its time and resources debating the issues of “What are we going to do?” and “How much should we spend on it?”
2. It spends far two little time on the important issue of “How will we do whatever we’ve decided to do, so as to have maximum impact?”
He sees “technologies” like the prepaid card as being able to play an important role in the second issue and offered the example of how a few smart decisions turned the area of HIV drug treatment from a low volume/high margin business to a high volume/low margin business. In the process, many more citizens received vital care while producers still enjoyed good profitability.
Mr. Clinton noted that technology should be used to address three big issues that are impeded progress around the world:
• Inequality – the tendency of poor nations to lack key capacities needed for economic advancement (he is working to rebuild Haiti as sustainable nation and economy), while richer nations that have great capacities tend to become rigid and too slow in responding to problems (like the spiraling increase in the cost of healthcare, post-secondary education, and energy in the U.S.)
• Instability – embodied in recent years by the threat from borderless terrorist organizations and the contagion that accompanied the recent financial market crisis
• Sustainability – which is seen most clearly in the demands of long-term energy policy and climate change issues. Mr. Clinton particularly sees economic opportunities for private companies in helping the nation change its approach to both energy production and consumption.
Turning to the issue of how the prepaid payments industry could make a technological contribution to these important societal issues, he offered six broad ideas:
1. Use general purpose cards to reduce the costs paid by some 35 million Americans who utilize relatively expensive “alternative financial services” today
2. Help the healthcare industry become efficient and transparent by reducing the overall administrative burden and paper flow in that business
3. Use prepaid cards to educate young people on financial management issues and raise the overall level of financial literacy in the U.S.
4. Provide modern financial services to people who live in remote and isolated communities all around the world
5. Improve the efficiency and control of disaster relief efforts and payments through the use of prepaid cards
6. Help move the country in the direction of “electronic accounts” and reduce the amount of paper and waste typically generated by financial accounts
I suspect that the former president understands that the prepaid industry is already deep involved in initiatives in all of these areas, but it was probably very gratifying to have those efforts acknowledged by a former world leader.
Mr. Clinton left the audience with an important reminder to look for situations that are not zero-sum games, in other words, look for “win-win” outcomes like the one he had described for HIV drugs. I’m hoping that everyone involved in our industry’s interchange debate took this message to heart.