Prepaid cards for a good cause

JP Morgan has been teaming up with law enforcement agents in Brooklyn and Chicago to provide prepaid debit cards for firearms. According to this article at Payment News, by offering prepaid debit cards throughout the these cities for turning in live fire arms at collection points such as churches, citizens received $100 in Chicago and $200 in Brooklyn. The program in Chicago, called “Don’t Kill a Dream, Save a Life” has brought in over 18,000 since the program started in 2006. A similar program brought in over 700 fire arms in Brooklyn. The guns collected are melted down and turned into hangers for use at dry cleaners.

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NETeller signs contract with TransSend

As announced here, NETeller has signed a contract with TransSend, and will soon be providing a prepaid MasterCard to TransSends e-wallet consumers. In response to the contract, NETeller stated that:

that the integration process between the parties is at an advanced stage, and it anticipates that Net+TM cards will be available by early October, when NETeller e-wallet consumers can also sign up for two new products.

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5th Annual Network Branded Prepaid Market Assessment

Keith KirkPatrick, the executive director for the 2009 Prepaid Card Expo, recently forwarded to me the first of Mercator Advisory Group’s annual series of three reports that will provide analysis of the prepaid industry. The report will include a review of the dollars loaded in network branded prepaid products in 22 different market segments.

Here are a couple of highlights that stood out:

• There was a total load of $38.66 Billion in 2007 on all Network Branded prepaid solutions. This is an increase of 44.5% from 2006. The total load for all 33 Prepaid Segments in 2007 (Open & Closed) was $218.3 Billion, which is $20.4 Billion more than in 2006, an increase of 10.3%
• Network Branded Gift Cards grew by 70%, becoming a $5.03 Billion market at the conclusion of 2007.

Members of the Mercator Advisory Group have full access to the report which contains 30 pages and 13 exhibits. Make sure to visit the site and become members in order to stay up to date with the latest prepaid trends.

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Gift Card Rescue: A new way to use gift cards

At All Pay News, they recently took a look at the new service for gift cards: Gift Card Rescue. This new service provides a way for consumers to receive cash or trade unwanted gift cards. They have over 30 available brands of gift cards available for exchange, or you can receive cash for up to 20% the amount of the gift card.

Will a site like this change the gift card industry? We’ve heard about the amount of money wasted on unused gift cards, now a company is looking to capitalize on that. What are your thoughts?

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New Bank Freedom Prepaid Visa Card

Bank Freedom got the approval needed from MetaBank and Visa, to “market the Bank Freedom Prepaid Visa Card. Bank Freedom”, as Trading Markets.com reports. The card will available in 10 days for use. Robert Christiansen, the COO of Bank Freedom, had this to say:

"We at Bank Freedom strive to be the prepaid card industry's leading example at how to best serve America's unbanked and underbanked individuals. Our business model is to provide a wide range of much needed financial products that improve the quality of life for our cardholders, saves them time and money, and eliminates their dependence on check cashing centers and money orders."

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A Prepaid Debit Card Service for Brazilian Immigrants

The Journal Record reports that the Central Bank of Enid in the US is helping visiting workers from Brazil send money to their families back home by offering the Tal Card. The Tal Card is a reloadable instant issue card with a PIN and a personalized MasterCard. Funds can be deposited to the card via ACH Direct Deposit, Green Dot, and participating banks.

Central National Chief Executive Brud Baker praised Tal Cash, the Brazilian owned company marketing the Tal Card for understanding this market. He also mentions:

“That knowledge is what makes these programs successful. Combine that with the fact that cardholders can send money to Brazil and 11 other Latin American countries for $6, and you begin to see the positive impact it has on the Brazilian community.”

A Tal representative mentions that in the future the Tal Card will offer its customers insurance and medical plans.

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Michigan’s governor implements new laws for gift cards

According to this article at Manage Smarter, Michigan Governor Jennifer M. Granholm has implemented new laws on gift cards and gift certificates throughout the state of Michigan. The laws will take effect November 1, protecting card users this holiday season.

Some of the rules going into effect in Michigan are:

-- Prohibit retailers from refusing to accept a certificate during a sale, closeout or liquidation
-- Charging an inactivity fee or other service fee to the consumer for using or possessing a gift certificate
-- Selling a gift certificate that expires less than five years after being issued.

Things will be changing for retailers too:

--Retailers are not allowed to restrict the holder of a certificate from using it in a manner consistent with the stated terms of the certificate
--Alter any terms or conditions after issue
--Refuse to accept the gift certificate as a portion of the payment where the purchase is greater than the balance remaining on the certificate
--Consider cards abandoned property after five years.

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A gift card designed with businesses in mind

Corporate Promotions and Incentives (CPI) LLG is now offering a new gift card to businesses which is paid for only when the gift card is used. Manage Smarter reports that these customizable gift cards allow companies to enjoy the power of giving while they avoid a huge expenditure at time, only paying for the program launch when investing in the cards. Gift cards can be used at the online store by the employees which has over 2,700 products available for purchase. After they are used, the company is invoiced for the price of the gift card.

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JPMorgan Chase Launches a Chase Workers Compensation PrePaid Debit Card

The ePaymentsnews Network reports that as an alternative method to paying injured workers, JPMorgan now provides insurance companies the Chase Workers Compensation Card prepaid debit card.

This prepaid card was designed to reduce costs associated with paper-based check distribution and to help improve managed funds distribution. Administrators can deposit funds electronically, track payments, and produce nearly twenty types of reports. Injured workers can access their funds at ATMs, pay bills online, receive cash back at retail locations, and use the cards anywhere Visa debit cards are accepted.

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Luxury Luddites Reject Gift Cards

Unhappy patrons at the South Coast Plaza luxury shopping center in Costa Mesa, Calif., have apparently forced the upscale mall to discontinue its gift card program and return to issuing paper gift certificates, reported in a news brief on Paybefore. A press release issued by the mall indicated customer complaints about difficulty using the card "for multiple transactions, fees attached to transactions, balances required to complete transactions and difficulty returning items that were purchased with the gift card program."

While its certainly understandable (and commendable) that the mall would listen and act upon the complaints from its customers, it seems strange that they were not able to resolve some of the technical issues that arose when customers wanted to use the card to make multiple purchases or return items.

So do other multi-merchant card programs have similar difficulties with these types of issues? I've used other mall gift cards and have not had these type of problems. Or do you think there is some other unreported issue at work?

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Identifying and Capitalizing on the Rise of Prepaid in Latin America

We’re dedicated to bringing you the latest insights in the prepaid card industry. Don’t miss your chance to view this free webinar being presented by Anabel Perez, President and CEO of NovoPayment Inc. ‘Identifying and Capitalizing on the Rise of Prepaid in Latin America’ will be presented on August 26^th in Spanish at 2:00 PM – 3:00 PM EDT and in English at 3:30 PM – 4:30 PM (mention priority code: (G1U2248W2BL) Here’s a brief description of the webinar:

The large potential market for prepaid products and services in Latin America is undeniable, with a population of 300 million underserved consumers with an aggregate annual spending power of $250 billion. In this webinar, you’ll learn about the market environment and demand for prepaid products and services across Latin America, understand which markets and applications are poised for rapid growth, and hear insight into the cultural differentiators that are paramount to consider when expanding into this diverse and expanding marketplace. Leading this webinar will be Anabel Perez, Founder, President and CEO of NovoPayment, Inc., a leading prepaid program manager and service provider that works with Latin America-based banks, mobile service providers, utilities, retailers and other non-financial institutions to enter the world of the prepaid cards, allowing them to find new revenue-generating businesses, as well as expanding their product lines to increase their market share.

Make sure to keep checking back for updates on future webinars since we will be posting them here. Register for the free webinar by clicking on the link below.

English: https://www1.gotomeeting.com/register/925277527
Spanish: https://www1.gotomeeting.com/register/675426055

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No-Interest Prepaid Card is Launched in the UK for the Muslim Population

We’ve recently announced the release of the EonCap Islamic Debit MasterCard in our previous post, but now ePaymentsnews Network reports that Cordoba Financial Gold will release a prepaid MasterCard named Cordoba Gold which will specifically target Muslim users in the UK.

The Sharia forbids earning interest, and so this card has been deemed “Sharia-compliant” since it charges and receives no interest for money stored by its users. Also, the issuing company donates 10 percent of its profits to various charities across the UK. The Muslim population is over 2 million strong in the UK, and so a “Sharia-compliant” card was long awaited.

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GreenDot joins forces with Citi

At Payments News, they report that Citi and GreenDot have formed a strategic alliance to issue general purpose gift cards and reloadable debit cards. With this alliance, GreenDot will have the opportunity to offer cobranded versions of these products to their customers. This will also allow them to further expand their national distribution of products. These new reloadable cards can be used wherever Visa or MasterCard is accepted and can be reloaded at any Green Dot Money Pack.

The CEO and founder of GreenDot, Steve Streit, had this to say about the new partnership:

“We are very proud to be working with Citi. They are a terrific organization with great retail partnerships. Citi and Green Dot share a common mission to provide core financial products and services to consumers through convenient retail locations. By combining the power of both companies, these important financial products and services will be more broadly accessible nationwide.”

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Visa Breaks Records at the Olympics

As we had reported in an earlier post, Visa, sponsor and provider of the exclusive card for the Olympic Games, had created a special prepaid card just for the event. As this article reports, nearly $10 million U.S. was spent on Visas prepaid, debit, and credit cards for opening day of the games. This is an increase of 11% in comparison to last year spend for the company. The top five countries that were the biggest spenders included USA, Japan, Hong Kong SAR, South Korea, and the United Kingdom.

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SkyEurope Airlines Offers New Channel for Payment

SkyEurope recently announced, as mentioned here, that they will start accepting payment in the form of prepaid cards. They have authorized consumers to use the pre-paid paysafecard for online purchases. This card is in use in 10 European countries, and uses a PIN code, instead of asking consumers to type in their entire credit or debit card number. Steven Greenway, of SkyEurope stated that:

“Our goal is to offer variety of fast and safe payment channels to our clients. Some passengers do not have access to debit or credit cards that can be used for electronic payments or they simply do not want to send their card number over the internet. We believe that by introducing the possibility to pay through paysafecard we will provide access to a greater spectrum of customer segments and provide more choice by providing a payment method that avoids paying additional credit card fees.”

Michael Müller, CEO of paysafecard went on to say that

“We are excited to announce our first co-operation with an airline company. SkyEurope is once more a true pioneer, when it comes to best-in-class customer service and safe e-commerce.”

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MasterCard Launches an Islamic Debit Card

Business Week reports in this article that MasterCard and EonCap Islamic Bank have jointly launched what it deems as the world’s first Islamic debit card, the EonCap Islamic Debit MasterCard.

Fozia Amanulla, chief executive officer of EonCap Islamic Bank mentions:

"It is designed to appeal to both Muslim and non-Muslim individuals who prefer better financial control as the card ensures that purchases are automatically deducted from the cardholder's account and approved only if enough funds exist within the account. It helps track spending, comes with worldwide acceptance at more than 26 million locations and can be used at an ATM for e-banking."

This card will also work on the PayPass system, which allows consumers to swipe it on a terminal without actually leaving the cardholder’s hand. A recent survey conducted in 2007 revealed that consumers viewed the biggest benefit of contactless cards to be the convenience factor. There are currently 24 countries in Asia which have MasterCard PayPass trials and rollouts currently underway.

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Givex giving back to the environment when you buy their gift cards

According to AllPay News, Givex, a provider of closed-loop technologies, has announced that they will partner with Tree Canada, and will plant a tree for every card order they receive to counter act the carbon dioxide released into the atmosphere when producing the gift cards. The trees will be planted near Espanola, Ontario. This is in addition to their already sustainable practices such as offering PVC cards, PLA cards, paper stock cards and soy based inks.

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Ohio Target for Social Security Prepaid Cards

We recently informed you in one of our posts about the use of prepaid cards as a method of payment for Social Security. Recently, as this article mentions, Ohio has become one of the states that the U.S. government wants using their prepaid option. Currently, those who use paper checks sometimes pay up to $25 per check in order to have it cashed. Alvina McHale, spokeswoman of the U.S. Treasury Financial Management Service, released this statement:

''You [Ohio] are clearly at the top of our lists in terms of states we want to reach out to''

The reason for Ohio as a target is because the state is ranked 5^th highest for the number of individuals who still use paper checks instead of alternative forms. In another statement McHale also informs citizens that:

“Any Social Security recipient, including those who already get payments directly deposited into their bank accounts, can request the debit card, but the ''unbanked'' recipients are being targeted”

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Paypal Releases Prepaid Debit Card

Marketing Week reports that Ebay’s online payment provider Paypal is launching a prepaid debit card with Visa and the Royal Bank of Scotland.

The Paypal Top Up Card can be used anywhere Visa is accepted. Paypal is targeting the card primarily to consumers who sell online since it enables them to spend the balances of the Paypal accounts offline. The card will cost £4.95 and can be reloaded at Post offices and Paypal retail outlets. This launch comes after Paypal’s release of their credit card in 2006.

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Good News for the Prepaid Industry

Fair Investment Company announced today that growth is expected for the Prepaid Industry. As reported in this article, their estimate is that the number of consumers in this industry will increase from 2.3 million to 7 million in the next two years. This amounts to approximately a tripling in the number of users. Fair Investment Company believes that the reason for the boom is the fear that individuals have in the current economy. Since there is no way to incur debt with a prepaid card, many feel safer using them instead of credit cards. Another notable point made by Phil Alcock, credit card expert for the firm, is that

"Parents looking for a way to educate their children to be responsible with their money find that prepaid cards provide an excellent teaching method because they give the child the chance to be independent and even purchase goods online, but there is a strict budget in place."

Whatever the reasons may be, the prepaid industry will not be experiencing the same recession that other industries may be facing.

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