Now that the younger generation is moving toward digitalization, the world is introduced to many new innovations. One such innovation is a prepaid card that carries various features to cater to different services for users. The prepaid card market is expected to grow at a CAGR of 31.1% during the forecast period of 2022 to 2026, increasing from US$35.69 billion in 2022 to US$105.43 billion in 2026. These cards are popular among customers for the benefits and values they offer especially in the fields of small and large businesses.
The card is a preloaded type and can be used anywhere through any form of payment method which makes it an amalgamation of a credit card and saving account. It occurred as a convenient alternative to bank accounts for people unable to use bank facilities. With many customer-oriented benefits, these cards acquire multiple features to help businesses and end-users depending on their preferences.
Types and classification of cards
The prepaid card started off as plastic reward cards of specified merchants but with the rise in its popularity and technology these cards are now available in virtual form as well.
A physical or plastic card is accepted in offline or online stores through various POS machines and contains a name, card number, and a magnetic strip to stand out for a particular user. A virtual prepaid card works in the same manner as a physical card except for the fact that it is used for online purchases and can be acquired instantly.
Both the cards are classified as Open-loop and closed-loop cards, where an open-loop card is reloadable and can extend its usage according to the user’s choice, and a closed-loop card is non-reloadable due to which its usage is limited for the user.
Smart cards as customized cards
For businesses to thrive in the digital preferring consumers market they need to obtain a merchant account for online payments and transactions to be stored and managed. In order to process the merchant account, one requires a MID (Merchant identification number) that verifies the account’s different functions.
A business can have multiple MIDs according to the services that the type of business provides. MID is a unique id number that identifies a merchant’s account and the type of discounts or rewards it is linked to. To engage the business in financial transactions through proper channels, three types of IDs are required:
Merchant identification number (MID) - This number is allocated to process the transactions in the merchant’s account.
Terminal identification number (TID) - As one merchant ID can be linked to many payment terminals, this number is assigned to identify the payment terminal.
Gateway identification number (GID) - This is a transaction gateway that encrypts, processes, and attains the transaction to which all the orders are transmitted.
Besides MID, the smart cards that regale businesses and merchants often need MCC (Merchant category codes) to be integrated into its system. The MCC is a 4-digit number that restricts the usage of a card for a particular purchase as per the user’s or merchant’s requirements. Business uses these numbers to categorize and restrict transactions for specific goods and services. The numbers also operate for tax reporting, interchange promotion, and collecting information about cardholders.
Multiple features of prepaid cards
Smart cards as debit cards and saving account
These cards are most commonly utilized for their features similar to debit cards. In addition to payments for various purchases and cash withdrawals the card also functions for multiple transactions.
Easy issuance and disbursement of funds
All kinds of prepaid cards are effortlessly available online in an instant for end-user as well as for multiple users. One of the best features of these cards is they are accessible immediately to numerous people and can be managed conveniently. Most business issues these cards for easy fund disbursement and management of employees’ expense.
Personalize cards
Smart cards are not bound to serve the same services repeatedly; instead, they are personalized and customized according to the user’s need. Businesses use personally designed cards to imprint their brand’s name and spread awareness while many merchants customize the cards with various benefits and rewards to entice customers. One can also make use of this feature for gifting their loved ones with personalized benefits.
A secure savings account
No bank account is required to acquire a prepaid card as the card is connected to a payment account. People without access to bank accounts or bank facilities are benefitted from the card’s account to save their funds and enjoy all digital luxuries similar to people with bank facilities. On the other hand, they are regarded as a more secure way to save funds because one can set the limit on their usage and can easily report cases of theft or loss to the card issuer.
Vivid features of BankIT smart cards
Instantly issue multiple cards for various users through BankIT’s web portal.
Customize the benefits and facilities card as per the company’s requirements and policies.
Use BankIT’s BYOCP (Build Your Own Card Program) to design a desirable card.
Track the expenditure and analyze the spent on multiple cards with the help of BankIT’s web portal.
Broadcast company information to numerous employees with BankIT’s notification feature.
24*7 availability of customer service is provided for all the consumers in case of any query.
