repaid cards are one of the simplest, yet most effective, ways to exert control over spending for both users and issuers alike.
Prepaid doesn’t need to be connected to a bank account. There’s no overdraft facility so cardholders can’t spend more than they’ve loaded, or incur interest or late payment fees. This explains the appeal of the platform and its plethora of applications.
Issuers don’t need a banking licence to offer prepaid, an electronic money licence suffices. They can also passport prepaid propositions across various EU countries, providing they meet local regulations.
Prepaid offers ultimate control, and with improvements over the last five years, mostly to functionality and back-end infrastructure, this is certain to remain the case.
Cardholders in control
Prepaid is at the centre of various overlapping trends. Firstly, the adoption of smartphones and apps, which deliver direct, digital functionality. Secondly, better processor and back end as a service (BaaS) functionality, which removes barriers to entry, cuts costs and boosts speed-to-market. Lastly, there’s the resulting real-time nature of prepaid, which allows various notifications and alerts.
This puts cardholders in control. If they misplace their prepaid card they can freeze it through their app and unfreeze it once it has been found. The same principle applies to payment channels — if they are cautious contactless card users or online shoppers, cardholders can switch certain channels on or off through their app or enable functionality in advance for a particular purchase.
Issuers in control
Issuers are in control — by utilising processing platforms it is possible to black and whitelist to restrict the use of prepaid cards to particular regions, countries or cities, or to particular store chains and outlets.
For example, various UK Premiership and Championship football clubs now have season tickets on a prepaid platform. Cards allow access at the turnstiles and payment in the stadium. Clubs can offer cardholder promotions in the ground or at merchants nearby. If fans can’t attend a game, they can sell their ticket through the fan app. This disables their card at the turnstile, enables the buyer’s, and helps prevent ticket touting at the same time.
Luncheon vouchers are popular in many markets. Digitising these on a prepaid card ensures that staff only use them at lunchtimes and at certain merchants. Staff receive a daily allowance and any unspent funds can be reclaimed at the end of the week.
These types of control features make prepaid suitable for previously unaddressed sectors: small or start-up businesses, new-to-country, new-to-banking, students and children.
How can CashFlows help?
So, if the smart money is on prepaid, how can CashFlows help you make the most of the opportunity?
As scheme members we sponsor programme owners and programme managers to enable them to issue cards, providing a quick and convenient alternative to them joining the international card schemes directly. This cuts the cost and complexity of the process, whilst improving speed-to-market for our clients.
We’re transparent on scheme and other associated fees and facilitate through clear settlement reporting with full itemisation of all costs. We’re also experienced. Our dedicated, in-house team have the knowledge, skills and expertise to guide you through the often-complex world of BIN Sponsorship.
So whether you are building your own specific prepaid programme or looking to offer a more general programme managed solution, CashFlows can help.
Cut red tape
CashFlows helps clients via its direct scheme memberships and industry relationships. We currently facilitate Mastercard and Visa transactions (and can work with other schemes if required). BIN Sponsorship saves you time, as well as the red tape and collateral requirements of applying for direct scheme membership.
CashFlows helps power end-to-end programme management solutions. We can provide acquiring services for prepaid card loads and leverage our supplier relationships to make referrals to trusted partners. These include card manufacturers and processors, who we’ve enjoyed working with over many, many prepaid projects.
To find out more about Cashflows’ BIN Sponsorship offering for prepaid, get in touch today.