Why do so many people get invited to my prepaid programme?

Rowan —  July 6, 2011 — Leave a comment

When launching a MasterCard or Visa prepaid card, it feels like a large wedding with too many guests. However each of them, like family, is needed to launch your card.

Your invitation list will normally include:

  •  A card manufacturer
  • An issuing bank
  • A processor
  • A programme manager (which for today we are assuming is the role you are playing)
  • MasterCard or Visa’s local office
  • MasterCard or Visa International
  • Possibly a fulfillment partner

Some players in the market integrate different roles, but most times they are acting as a middleman and the role is played by someone else. Looking at each role separately:

The card manufacturer will produce your physical plastic cards. This can’t be any manufacturer as they need to be certified by the card association. It is always better to be quoted directly by the card manufacturer, even if the issuing bank or processor has an existing relationship with them. In theory you can have cards produced by any certified card manufacturer anywhere in the world. In practice the processor and issuing bank may specify a card manufacturer that they already work and integrate with. A card manufacturer will:

  • Receive your card design
  • Update the design and return a proof for your sign off
  • Put the card “online” for the card association to approve
  • Once they’ve received approval they will manufacture base stock. This is the actual plastic with your design and the association logos but without any 16 digit PAN number, expiry, CVV, PINs or encoding of the magstripe
  • Call for a personalisation file from the processor. This file contains all the card numbers, expiry dates, magstripe data right up to customer names and addresses or even PINs if required. Since this file has to be sent between the processor and manufacturer in a secure manner, this is the reason why processors often perscribe a manufacturer that they will work with
  • The manufacturer will then “perso” the cards and have them ready for your collection

This is sometimes when a fulfilment parter comes in as they may collect the cards from the manufacturer, distribute them or even merchandise it depending on your type of programme.

The issuing bank will firstly process your card association paperwork, secondly meet the local regulatory requirements and thirdly hold the funds in a single pool account.

Card associations will process the paperwork, allocate a BIN, register the programme and approve the card design. The local office will normally act as the communication channel but the actual approval may well occur in another country and fall under their international operation.

Your processor will play a major role and that can include:

  • Creating card accounts and if needed PINs
  • Configuring their system with your BIN and parameters
  • Processing authorisations against the cards
  • Producing clearing files each day
  • Providing a settlement report or file to the issuing bank to move funds
  • Providing cardholder support whether mobile, web or call centre
  • Monitoring fraud
  • Providing back office services such as submitting chargebacks

This leaves just you, the programme manager, who is normally responsible for:

  • The programme and product design
  • Marketing of the product
  • Sometimes cardholder support
  • Ensuring that amounts loaded on the card reach the pool account

So truly many guests!

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