Prepaid Card Archives - Digital Payments, Payment Security and Lending

What are Pre-Paid Cards and how do they work?

By referring to Prepaid Cards, we first need to agree on what do we understand by Prepaid Card, and how do we see it? Do we see it as a closed card program or an open card program? Many get confused in the definition of what exactly is a Prepaid card? A Prepaid Card can be defined as a secured card (a plastic) that enables users to process transactions in order to make purchases of goods and/or services. We can then say that we do have two types of Prepaid Cards: Closed Card Programs. Open Card Programs. A Closed Card Program is usually referred to as a closed-loop, mostly in the form of Gift Cards, used by many stores. On the other hand, an Open Card Program is usually referred to as a debit card, which is linked to a bank account. Both solutions could be referred to as Prepaid Card solutions; however, one does not require the need of having a bank account but for the other, having a bank account is a must. To some extent, some countries around the world are now initiating closed-loop programs, as a debit card, for domestic card transactions. For instance, a country may opt to have a closed-loop domestic card program that can only be utilized in the country, in form of a domestic prepaid card scheme. In today’s world, Financial Institutions (FI) are working hard to promoting Financial Inclusion by providing financial services and/or products to customers at a very affordable cost. However, despite, the efforts and times put together by Financial Institutions, the results for getting everyone inclusive into the Financial Ecosystem is still low. Therefore, FI is constantly improving their products/solutions in order to meet customers satisfaction by positioning solutions such as Prepaid Cards in order to make inclusion attractive. That is why, to meet customer’s satisfaction, Financial Institutions have opened up to the closed/open loop payment program to reach out to all markets and/or segments. These programs have been put in place to solving problems for Consumers, Retailers, Corporates, and Governments. The benefit of those cards is that consumers can make use of the solution to make a purchase, pay bills, transfer funds, and/or withdraw cash from an ATM, Merchant/Retailer stores, or an Agent (Agency Banking), in a very convenient and secure way. Prepaid Cards used by the bank (“the debit card”), can also be offered to customers who do not qualify for credit facilities. By these means, the bank is offering a product to customers which will enable them to transact by using their own funds. On the other hand, Retailers or Merchants are also offering similar solutions to customers in form of Gift Cards, for instance, as previously mentioned. Once a Prepaid Card has been offered to a customer, the Service Provider will immediately issue a card to the customer in order to enable the customer to start transacting from day one. Nevertheless, to make this mechanism fully functional: A plastic card will have to be issued to the customer. Customer will have to load own funds onto the cards. The card will have an Expiring Date, Card Number, and a PIN. Customers can now start transacting. Yet, for Prepaid Card such as Gift Cards, cards can only be used within a network of retailers, and most of the time, the card does not have a PIN number for acceptance of transactions. However, transactions are authorized on a signature basis. So, Prepaid cards could be considered as a fast-growing segment for Retail Banking and Merchant Services Industry despite entries of new innovative payment technologies. Author: Nsele P. Bokuma, Director-Sales, South Africa Wibmo A PayU/Naspers FinTech Company Card Payment, Digital Payment, Online Payments, Prepaid Card

Move to Pre-paid Cards for Simplifying your Corporate Expense Management

September 28, 2021 / Krishnan KN

Tracking Corporate Expenses made easy Corporate expenses range from individual employee benefits to infrastructural allocation to individual units. Everyone has heard the terms reimbursement, employee benefits claims, and other expenses albeit through the prism depicting a myriad of reactions — most of them unsavory to put it mildly. While the corporate executives find the long process of filing expense reports and submitting the invoices tiresome and at times bordering on lack of trust, the accounts find themselves in an unenviable position of questioning, auditing, and reconciling them with the Company Budget. And when auditors do come out with systems to reduce frauds, Department heads are regularly at loggerheads with accounts over the paperwork. The sum total is interdepartmental bad blood and a constant state of tug of war that can adversely affect both the operations and the accounts. Prepaid Cards for Corporate expenses are a boon to both employers and employees. Prepaid cards are one of the best tools to manage corporate expenses. It is no secret that as the company grows so do the expenses, especially the travel and other petty expenses which form a substantial percentage of the overall budget. The bottleneck in tracking is that the disbursement is through individual employees whose numbers might run in hundreds and at times in thousands. This is where maintaining a balance between fraudulent or mistaken charges versus operationally profitable charges becomes a challenge. The prepaid card enables control over the employee spending through a limit set over time and the amount. This also reduces the massive burden of claims or reimbursements. With reduced dependency on actual cash transactions, policy adherence and automated tracking enable the auditors to access a lot of information without depending on the employees for details saving both time and faceoffs. Pointers to get the most of Prepaid Cards to manage corporate expenses. Ideally, the Prepaid cards could be a major relief, but in practice, it is possible only if certain standards are maintained in the implementation and usage of this facility. Selecting a Vendor who would equip and facilitate these services, is crucial to the successful issuance of the Prepaid cards to the employees or other stakeholders of the company. The prepaid card program must be customized as much as their budget would allow. It should strictly adhere to the company policy with separate options for both open and closed-loop programs. The cards should be configured according to the needs, specific to the company for example some might need it to be used in ATMs while others might want it to work within just the cafeteria and sister concerns of the company. Some could select merchants or categories for a certain department or particular grades. E.g., sales teams should have options to use it on online travel sites or enable multiple currencies for certain grades. Wibmo’s Prepaid solution meets all these requirements and more. Covering the whole range of corporate expenses from payroll to daily expenses and travel expenses they are easy to use and have reloading wallets backed with 24-hour customer support. With every advancement comes its own set of risks and unethical practices. The good news is that the market has vendors who can provide services and fortify them against fraud. Two-factor authentication is always recommended for such cards with EMV chips for added security. Market Proven tools like TRIDENT-FRM can be used to disable fraudulent attempts. Additional security and control can be attained through vendors who provide Host Complete back-office card operations. In short, the prepaid cards can empower the companies to control the corporate expenses thereby bring them down without much sweating whilst the employees, now more aware of the limits, need not spend their productive hours filling out expense reports and more importantly feel more trusted with their dignity intact. Author: Krishnan KN, Advisor in Wibmo’s Agile PMO Wibmo A PayU/Naspers FinTech Company Expense management, Payment Security, Prepaid Card, Reimbursement

Move to Pre-paid Cards for Simplifying your Corporate Expense Management Read More »