Q&A: Brian Parlotto, InComm, On Prepaid Game Cards

By Alicia Ashby On February 23, 2009 · Leave a Comment

There's been much much discussion in the past few months about growth and change in the payments industry, especially as concerns prepaid game cards. The number of players in this noisy space is ever-changing, but one of them is a curiously silent giant. Privately held, InComm claims a sixteen-year track record as a pioneer in the prepaid gift card industry. SVP of Products and International Sales Brian Parlotto characterizes InComm as the industry leader when it comes to sales of prepaid game cards at retail.

"We signed our first partnership in this space five years ago, with two
major companies. The category as a whole, we started expanding
aggressively about two years ago. Now we have about sixty partners that
we do business with. I think looking at key retailers has taken this
category and helped accelerate its growth with advertising and
placement," said Parlotto.

VGN: Can you tell us a bit about Incomm's overall prepaid card buiness?

Parlotto: InComm is focusing on four major areas as it relates to prepaid cards. Telcom (wireless and long distance), open loop financial cards third-party gift cards, and digital content, which is focused on music and gaming.

VGN: Which games and virtual worlds do you handle pre-paid cards for?

Parlotto: I don't want to mention names of partners as I won't have permission for that disclosure, what I will say instead is that InComm has all the major console gaming, online, MMOs, as well as casual gaming partners. Our partners are all top-tier in this space, and there's more than sixty partners we do business with. These relationships are across multiple countries in North America, Europe, and Japan.

VGN: Which retailers do you distribute cards to?

Parlotto: All the major consumer electronic retailers in the United States are partners of ours. InComm has a wide variety of retailers across all major categories. That includes drug, grocery, big box, entertainment, and wholesale stores. I think it's worth noting that InComm has a distribution channel with 145,000 locations in our network.

VGN: Roughly when/why did Incomm enter the market for prepaid cards?

Parlotto: InComm has been in this technology space for sixteen years. We pioneered this space. We're really a packaged goods company that offers a turnkey solution for retailers to bring new products into their channels enabled through our superior technology. That's been our focus for over sixteen years.

VGN: How much of the prepaid card market would you estimate is controlled by InComm's cards?

Parlotto: InComm’s growth in 2008 was roughly 200% in this space.

VGN: Can you quote some more general figures?

Parlotto: Being privately held, we tend to not share many of our financial numbers. InComm processed 8 billion in sales last year across all groups, though.

VGN: Could you mention some growth figures or adoption rates?

Parlotto: We continue to add partners and retailers in an aggressive space, that's a catalyst for growth in this industry. We're at the forefront of that and we'll continue to be there.

VGN: How do you view the prospects for pre-paid game card growth, relative to the overall market for prepaid gift cards?

Parlotto: The continued growth in this sector is driven by disposable income among youth, primarily. We continue to see growth in this space because it's least likely to be affected by the recession. Parents are least likely to take spending money from children. So we're bullish on the area and we continue to add partners. We're seeing new retailers coming on to carry the products and we're seeing new partner who want us to carry them. It makes for a great combination of revenue and growth.

VGN: What role do you think prepaid cards have to play in growing market for virtual goods businesses?

Parlotto: I think it plays a huge role because of the market virtual goods focus on, which is typically un-banked and without a credit card. Each of the cards make the goods available to a group that couldn't attain it previously. I've heard stories from partners of ours who have to sort through cash they've gotten in the mail with a user name in order to purchase virtual goods transactions. Using a prepaid card is an enormous saving for the provider.

VGN: What new partners or projects does Incomm having coming up in the future?

Parlotto: We continue to expand our technology, and with that expansion, it makes it easier for consumers to make payments. We can continue to come up with better solutions to make buy easier. We have a couple things we're working on that will enable consumers to have a greater sense of stickiness to a given virtual goods outlet. A lot of that focus is [on] how do we expand what we're doing with our partners? Today you can buy multiple cards in a single pack, and we're looking at bundling options that let partners have solutions they couldn't without our technology.