The prepaid and gifting market is a growing global opportunity.
Prepaid cards are simply a way of holding and gaining access to value (cash or other units, such as loyalty points) held on a card account. Typically, value is pre-loaded onto the account before the card is used, although in many cases the value is not 'activated' until the card has been either swiped at the PoS or activated over the phone, or on the web, or using a central database activation process.
Depending on the client's programme requirements, stored value cards can be designed in many forms: disposable or reloadable, generic or personalised to a named individual. Value stored on a card can be spent at participating merchants and generally via all the main sales channels: PoS, e-commerce, unattended payment terminals and over the telephone.
Typically all transactions from cards (purchases) or onto cards (value loads) are authorised in real-time by the issuer, which ensures the integrity of the system and guards against fraud and cardholder loss.
Until recently, most prepaid cards were issued as a direct replacement for paper gift vouchers. Increasingly, as the market begins to understand the benefits of prepaid, a range of new and exciting products is being adopted. Examples include insurance replacement cards, payroll cards, loyalty cards and promotion and incentive cards.
How can Accourt help?
At Accourt, we assist issuers with innovative ways of marketing and dispensing these products as well as advising on risk and operational management issues.
Contactless
The use of contactless card technology is growing around the world, largely driven by investments in EMV chip acceptance.
There are many advantages to retailers for accepting contactless payments:
- Capture card payment transactions of typically €15 and under in less than a second.
- No authorisation, signature or PIN required.
- Reduced queues, allowing greater customer throughput.
- Become the preferred retailer for all contactless card users.
- Higher spend from customers, who are not limited by the change in their pockets.
- Same secure network as Chip and PIN.
Equally, there are advantages to cardholders for using contactless cards:
- Always have the correct change to pay.
- No need to deal with PIN numbers or signatures.
- Less time spent queuing.
- No contact is required, so faster transaction time.
- Contactless maintains a spending record, unlike cash.
How can Accourt help?
Accourt is at the forefront of developing the contactless proposition for issuers and is well placed to provide strategic advice as well as operational know-how on product development, programme delivery, compliance and regulation, together with issuing and processing.
Micropayments
One challenge now facing banks is to move further down the payment chain to service transactions below €15 using cards rather than cash.
There is a growing base of contactless technology supporters who believe that this is the solution for low value electronic payments, but operating within the existing payments infrastructure. There are, however, issues that need to be addressed before low value payment transactions become truly viable. Today, each payment has to be cleared and settled individually and recorded for customers on monthly statements. Transactions are subject to similar pricing structures as debit and credit and, consequently, low value payments struggle to break even.
However, with the advent of Chip and PIN technology multiple applications may reside on a card and, with the addition of a small applet, off-line processing of low value payments can be carried out at a cost-effective rate.
How can Accourt help?
Accourt is working with banks and the wider financial services industry to develop an effective strategy for leveraging available technologies so that viable cost-effective solutions can be deployed for low value payments. Applications range across transport, vending and parking, as well as in the fast food sector.