Enabling Technologies

7 Prepaid Solutions offered by Payment Companies

From $148 billion loaded by consumers onto the network branded prepaid cards in 2009, this sector has definitely gained the critical mass. The amount expected for 2014, as predicted by Mercator Advisory Group stands at $ 354 billion. To tap into this market, a number of companies have released tailor made prepaid solutions. Some of them have been discussed here:

Berkley Payment Solutions:

Berkeley payment solutions was founded in 2006 in North America to deliver MasterCard and Visa prepaid card programs for governments, financial institutions and corporations. It offers an extensive suite of services including product development, program management, IT consulting, accounting, reporting, integration, card design, processing and card fulfillment. It serves major government clients and over 500 corporate (like Nissan, Yamaha, Adidas, HP, HSBC, Revlon etc.) in North America spanning all industries and business functions.

Prepaid Visa and MasterCard programs provided by Berkeley have large number of uses such as:

Berkeley payments solutions provide both reloadable and non-reloadable card programs. It`s reorder rate is approximately 97% because its solutions deliver business results for its clients. It also provides a number of reporting options to help its clients track and measure the success of each program. It provides flexible platform for its solutions which can be easily integrated with client`s existing systems. Some of its competitors in this industry are Green Dot, EntroPay etc.

Bluebird:

Bluebird, a prepaid card initiative by American Express and Walmart was launched in late October 2011, in addition to American express’s digital wallet platform ‘Serve’ . 3 months later in Jan 2013, there were 575,000 customers of Bluebird according to Dan Schulman, Group president of enterprise growth, Amex. 85% of Bluebird customers are new to Amex and 45% of them are estimated to be under the age of 35.

The American express Bluebird is a low cost alternative to the general purpose prepaid card. The bluebird does not charge a monthly fee for activation and can be obtained for $5 at the Walmart stores or for free online. If the cardholder is enrolled in direct deposit, it offers free ATM withdrawals within the MoneyPass network whereas other withdrawals are charged at $2.

The Bluebird can be loaded for free from a bank account or by using cash or debit card at Walmart. Loading with a debit card costs $2. Customers can deposit checks by snapping a picture from their smartphones, electronically pay bills, send cash to family and friends and place upto $100,000 into their accounts. Users can withdraw a maximum of $500 per day and $2000 per month. If a customer wants to send money to someone that does not possess Bluebird, all he has to do is click “Pay Bills” and then add that person as a payee. The receiver’s address and name is required but no social security number or EIN which makes the process simple. The user accumulates 5 chase reward points for every dollar spent which can be redeemed for various goods and services. So there is reward/discount added to a payment instrument. Well, i have always believed that its a good combination.

TransCard:

TransCard is a financial services firm founded in the year 1993 by Stephen Craig Fuller is doing a lot.

The company enables these institutions to grow deposits, fee income, deepen their treasury relationships, expand product offerings to the under-banked and turn unprofitable customers from cost items to contribution items. The current product portfolio includes payroll cards, general purpose reloadable cards and gift cards.

Praxell:

Praxell is a Prepaid Debit Card Program Manager based in New York City. It is one of a group of prepaid debit card providers which offer service in partnership with Ingo Money. Praxell provides prepaid debit card services to different financial institutions and employers.

Founded in 1999, Praxell is headquartered in New York City, has R&D facilities in Israel, and sales offices in North and South America, Europe, and Asia. Its platform is quick and integrated with credit card and ATM networks, payment processors, POS networks, and retail systems around the world. It has two card solution: Prepaid debit card Solution and Closed Loop Card Solution for benefiting two different type of segment.

  • Prepaid Debit Card Solution: Praxell provides Progreso Prepaid MasterCard, a prepaid debit card solution. It is distributed nationwide through different retail outlets (convenience stores, check cashers, and self-service kiosks) and also offered by online merchants. 
  • Closed Loop Card Solutions: This product has been used since 2001, by consumers worldwide which includes customers like Les Galeries Lafayette, Toys’R'Us and Office Depot. It enables retailers to implement a range of card and marketing programs that reward and direct consumer behavior. 

Recently, Praxell had teamed up with Arroweye Solutions (Card marketing and production) and ABnote (American Banknote corporation) to launch an identification and banking card as a solution for the unbanked community. You can read also Lets Talk Payments interview with Arroweye CEO Render Dahiya.

RushCard:

The amount of money loaded onto prepaid cards more than doubled, rising to over $113 Bn from $57 Bn in 2009, according to Mercator Advisory Group. With increasing competition, the star power of celebrities such as Suze Orman and Justin Bieber has becomes key for companies to get their prepaid cards in the media. RUSHCARD, founded in 2003, is one such attempt by the music mogul Russell Simmons.

http://vimeo.com/37988039

Rushcard is very much a customer centric model of providing financial assistance to the 68 Mn Americans who do not have a traditional banking relationship. Rushcard provides them with the help and apt tools to decide how to save their money and move ahead in life. It provides services such as to offer Direct Deposit, check writing capabilities, cash loading options at more than 35,000 MoneyGram locations and also provides with comprehensive online money tool to track balance, do financial budgeting and analyze spending.

Rushcard has a mobile app. One can also use PayPal to transfer money to the card. It also has the provision for various plans and one can customize the plan as per the requirement.

The pricing for Rushcard is on the higher end however. The fees for Russel Simmons’ RushCard are double the average prepaid card fee, according to a survey by BestPaidCreditCards.com. It costs $9.95 per month, which is 104% more than the average $4.88.

Chase Liquid:

The Chase Liquid prepaid cards are targeting teenagers and youngsters by offering a non expensive, convenient system for withdrawals and cash transactions.  The prepaid card industry pundits have long believed that companies require a proper segmentation, targeting and positioning of prepaid cash cards. Teenagers are certainly a good segment as parents don’t want to give them access to unlimited amount of money (unlike credit cards) and want to track the spend as well (unlike cash).

Chase Liquid is a reloadable card that can be used at any terminal that accepts VISA® debit cards. It does not charge any fees to open account, load cash, withdraw or reload money onto the card. The Chase Liquid card charges a flat rate of $4.95 a month. There is no charge for getting paper statements or paying bills either.

The prime offering of Chase Liquid is free check and cash deposits and free atm withdrawals. 17,500 ATMs are in operation along with 5,500 branches in 32 states. Chase Liquid does not charge for customer service. The card can be loaded with as little as $25 to begin with.

1Pay:

1Pay by Evolution1, a suite of payment solutions that allows simplified access to healthcare account funds claims to enable flexible automated provider payments and reimbursements that use best-in class web,  printing, virtual payment and mobile technologies.

The Evolution1 Prepaid Benefits Card claims to offer clients smooth, paper free processing of HSA (Health Savings Account), HRA (Health Reimbursement Arrangement) and FSA (Flexible Spending Account) claims and reimbursements without having to deal with complex IT costs, transaction fees and other administrative work.

Using a prepaid benefits card improves a participant’s or users cash flow and increases convenience. Evolution1 and its Partners saved its customers and their employees more than $2 billion in 2012 through annual healthcare cost reductions and tax savings. Evolution1’s software serves more than 9 million consumers through partners such as Blue Cross Blue Shield of North Dakota and CieloStar.

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

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