At the third annual Prepaid Press Expo, you are going to hear a lot about convergence, prepaid convergence. And, unless we miss our guess, the Expo is not the only place that you are going to be hearing about prepaid convergence. The convergence of prepaid services at the consumer level is the next logical step in the evolution of the prepaid industry.

Today, we see a wide range of prepaid services, growing wider every day as enterprising entrepreneurs continue to develop and roll out innovative services. New markets are springing up like daisies in May; markets that were unforeseen until some prepaid product burst onto the scene.

The second biggest hurdle that prepaid innovators face, after designing and developing their products, is how to market and sell them.  Actually getting to the point where willing consumers part with their money for the new prepaid products is a task that is not to be underestimated. Unfortunately, in the post-bust financial era, there is not a lot of venture money available to support speculative products that do not show immediate consumer appeal.

The good news is, once a product gets to a certain point of consumer acceptance, viral marketing (formerly known as ‘word of mouth’) may take over and jump start the new product. The bad news is that few products get to this stage. In the past nine years, we have seen countless ideas for new prepaid products. These exciting new ideas are pushed to us by press releases, emails, telephone calls, and face to face by often over-the-top promoters. A year, or a few weeks, hence, and most of them are not around anymore. (The better ideas sometimes re-emerge, so don’t think we are cynical if we pooh-pooh your idea, it’s just that we may have seen it before.)

No matter how innovative or compelling a new product may be, the fact remains that the vast majority don’t get to a critical mass of consumer acceptance before the money runs out. Time is of the essence. Legendary football coach Vince Lombardi once said that he never lost a game, but did allow that the clock occasionally ran out before he was finished.

If you accept the notion that most new prepaid products fail to reach critical mass in time, what is the answer? How can this vicious cycle be broken? Let’s do a little triage. First, how about a faster development cycle? I personally think that too many products that are pushed too fast are not well thought out, or have fatal bugs in them. The prepaid consumer does not have the patience or the inclination to deal with products that are not well designed or implemented, so shortening the development cycle would probably increase the failure rate.

The economic reality today is that it is highly unlikely that those who finance the development of new products are going to relax their impatience. In fact, it is probable that venture capitalists and investment bankers are going to become even more impatient and risk averse as regulations and slow business conditions push the envelope further.

If you have been paying attention, and I hope you have, there is a solution to the dilemma that prepaid providers face today. For a clue, look at the title of this missive – Prepaid Convergence.

For now, Prepaid Convergence is a concept with only a few successful examples. The most visible are the prepaid malls, now in thousands of retail locations. These racks of cards converge, at least physically, calling cards, wireless, gift cards, debit cards, and other specialized prepaid products. The CARD Act, as reported in the pages of TPP, will alter the way these prepaid malls operate, possibly in some very significant ways.

Regardless of what happens with malls, a vital lesson about prepaid has been learned. The lesson learned, in short, is that when disparate prepaid products were combined, co-located, at retail points of sale, synergies kicked in, and the whole was greater than the sum of the individual parts.

The 99th card on the rack likely had a much sharper ramp up curve than the first few did. In fact, the 11th card probably had a sharper up tick than the 10th card, all things being equal. Being on the rack is not a guarantee of success, but it is a guarantee that card will be given at least a fleeting consumer glance at a point in time when the consumer is in a buying mood. Convergence is the future of prepaid.

Shortening product cycles is the great promise of Prepaid Convergence, and Prepaid Convergence is what TPP and The Prepaid Press Expo are all about. Be there August 24, Caesars Palace, Las Vegas. You will be glad you came.