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Types of Prepaid Programs
TCCI may market, promote, distribute, or service the following types of Prepaid Programs for issuing banks as part of its general business operations:
Open loop cards are cards that are generally branded with a specific network or multiple payment networks (MasterCard, Visa, Discover, Star, Plus, Cirrus, Maestro, etc.) according to rules further established by such payment networks or regulations such as the Durbin Amendment (requirements for multiple, non-competing networks). Open loop cards may be used at any merchant, automated teller machine (“ATM”), or point of sale (“POS”) device that accepts transactions for processing through such payment network. Typically, the payment networks are prominently displayed on the front (usually, the primary network such as MasterCard, Visa, or Discover) or on the back (typically, the ATM or POS networks) of the card. The purpose for utilizing a brand on an open loop card is to increase its acceptance by merchants, ATM’s, and POS devices. In other words, by utilizing one or multiple networks, Cardholders have a much wider choice of where to use the cards which makes the cards more popular and valuable to the consumer.
Closed loop cards are cards that are generally NOT branded with a network on the front or back of the card (typically the case) – OR – may only include a limited network or be accepted at a network owned and operated by a single merchant or affiliated group of merchants. These types of cards are utilized commonly by department store chains or restaurant chains because such retailers specifically want to limit the acceptance of such cards to their stores only (to reduce competition). The benefit to the consumer is that such retailers typically offer special incentives and discounts to make these cards more valuable to the cardholders. Closed loop cards will typically only include Gift, Incentive and Loyalty, or virtual cards (see definitions below). These cards are typically distributed directly by the merchant or entity that is accepting them (in other words, the issuing bank will allow the restaurant to distribute the cards to the restaurant’s own customers under a distributor agreement).
A network branded card is a card that is branded with a specific network or multiple payment networks (MasterCard, Visa, Discover, Star, Plus, Cirrus, Maestro, etc.) according to rules further established by such payment networks or regulations such as the Durbin Amendment (requirements for multiple, non-competing networks). Network branded cards may be used at any merchant, automated teller machine (“ATM”), or point of sale (“POS”) device that accepts transactions for processing through such payment network. Typically, the payment networks are prominently displayed on the front (usually, the primary network such as MasterCard, Visa, or Discover) or on the back (typically, the ATM or POS networks) of the card. The purpose for utilizing a brand on an open loop card is to increase its acceptance by merchants, ATM’s, and POS devices. Typically, open loop cards are synonymous with network branded cards, but not always.
As the name would imply, an unbranded card is a card that is not branded with a specific payment network. This should not be confused with the branding of the issuing bank that issued the card. Typically, unbranded cards are synonymous with closed loop cards where the merchant is distributing the cards and operating its own network for acceptance of transactions on the card.
A personalized card is simply a card issued to a known entity that holds the name of the cardholder printed on the front of the card.
An anonymous card program is a card program that does not collect the identity of the cardholder at the time of issue. This is common for gift card programs, non-reloadable card programs or low limit programs ONLY where rules and regulations do not require the collection of the cardholder’s identity.
A non-personalized card is a card that does not have the name of the cardholder printed on the front of the card. This is common for gift card or closed loop programs where the cards may be single use, non-reloadable, or have low limits. This does NOT necessarily mean the identity of the cardholder is unknown. In some cases, the cardholder may be known and have CIP performed, but due to certain factors (instant issue, low limits, etc.), it may not be necessary or desirous to have the cardholder’s name printed on the front of the card.
Reloadable cards are cards that may be loaded multiple times, either up to a specific number of times (set reload limit) or up to a specific expiration date (may be loaded multiple times, continuously subject to load limits set by law or the issuing bank until the card expires) from various sources. Some reloadable cards may only accept such loads from employers.
Non-reloadable cards are cards that will only accept a single load (not necessarily single use as the balance from the initial load may be drawn down through multiple transactions) and cannot be reloaded from any source.
A mobile wallet is essentially a virtual card or collection of virtual cards that the cardholder stores electronically via a soft-token or mobile application on their mobile phone or other device (tablet or PC). Consumers can set parameters for the usage of the virtual cards on their mobile wallet based upon spending or other pre-programmed habits. For instance, a consumer may hold a virtual gas card, virtual grocery store card, and general spend card. Any time a gas purchase is made (whether through a specific merchant or not), the gas card would be “top of wallet” and automatically selected for use. If a purchase is made at a grocery store, the grocery card could be used. All other purchases may go to the general spend card. Typically, such mobile wallets also include the capability of transferring funds between linked accounts or utilizing the SMS (texting) function of the phone to transfer money or send money to others that have a linked account.
Virtual cards are becoming very popular with consumers and merchants alike and are still evolving (and doing so rapidly). Virtual cards are typically merely the creation of a card and card account at the issuing bank and processor, but utilize a corresponding redemption code that the consumer (“cardholder”) utilizes at checkout. They are most commonly utilized as part of a closed loop Prepaid Program or in connection with a mobile wallet where a physical card is not needed, but the information is stored in code as part of a mobile application on the cardholder’s mobile phone or other electronic device (tablet, PC). Consumers utilize virtual cards because they are convenient and immediate. Issuers utilize virtual cards because they can be immediate and eliminate the costly expenses of manufacturing, printing, personalizing and distributing/mailing a physical card.
The Card Collaborative International, LLC is comprised of long-term professionals from the Prepaid Card Industry. The Executive Team represents collectively 75 years worth of Prepaid Industry experience. You can locate us at:
1800 Pembrook Drive, Suite 300
Orlando, FL 32810
P: (407) 667-4700
Toll Free: 800-470-2090
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