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Insurance industry

AAA's Stored Value Card Pilot Shows Positive Results

Strategic Insights

— 2 min read

The Automobile Association of America (AAA) launched a pilot of two stored value cards with Fleet Boston Corp. and Visa, targeting AAA members traveling internationally and domestically. The early indications are that members are responding positively to the new payment option, as it provides safety and security equivalent to other methods, with no liability and replacement within 24 hours. The pilot was a limited test to establish member acceptance, financial feasibility, and usage, and according to Tom Wilt, managing director of partnership programs at AAA, acceptance by members has been good both domestically and internationally.

Key Takeaways:

  • The AAA MemberCash card targets international travel and enables access to cash in local currency at ATMs, while the AAA MemberOne Card is used for domestic travel and functions as a Visa Check Card.
  • The stored value cards were launched with 20 offices of four clubs, including the Automobile Club of Southern California, California State Automobile Association, AAA Michigan, and AAA Missouri.
  • Tom Wilt, managing director of partnership programs at AAA, stated that there was no marketing or promotion, and the product was only offered as an alternative to paper products like travelers checks and cash.
  • The Fleet chip-based stored value card pilot with the city of Boston was recently completed, using cards instead of coins in the city's parking meters around Boston University.
  • Allen Pease, director of Fleet Boston Corp.'s Advanced Card Technologies Group, stated that the pilot in Boston was successful because it solved a problem for the commercial customer, the city of Boston, by processing multi-millions of dollars in coins more efficiently.
  • Marc Abbey, principal of First Annapolis Consulting, believes that the ultimate success of stored value cards will depend on the implementation of the program, and that private-label stored value has enormous potential and a growing market.
  • AAA's evaluation of the product is expected to be completed within the month, and Tom Wilt is optimistic about the product, citing good member acceptance and positive responses.

Statistics:

  • 20 offices of four clubs launched the stored value cards pilot with AAA.
  • The Fleet chip-based stored value card pilot with the city of Boston processed multi-millions of dollars in coins.
  • 24 hours is the replacement time for lost stored value cards.
  • The private-label stored value market is growing rapidly, according to Marc Abbey of First Annapolis Consulting.
  • The city of Boston used the Fleet stored value card pilot to process millions of dollars in coins more efficiently.

Sources:

  • Susan J. Aluise, "Stored Value Cards Gain Traction Among Merchants," CardTechnology, August 1996
  • Interview with Tom Wilt, managing director of partnership programs at AAA, 407/444-8000
  • Interview with Allen Pease, director of Fleet Boston Corp.'s Advanced Card Technologies Group, 617/346-5463
  • Interview with Marc Abbey, principal of First Annapolis Consulting, 410/855-8500

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