OTC debit cards with loyalty function almost ready to roll
With the recent granting of a patent, a debit card that doesn't discriminate against those without bank accounts is nearer to being launched.
In the United States, more than 45 million people don't have a bank account, and even more don't have credit or debit cards, or private store cards. These people are practically excluded from the convenience of buying goods with a card and - in some cases - of taking part in loyalty programmes.
The company A company based in Florida, Default Proof Credit Card System, Inc. (OTC BB: DPRS), has set out to step into this gap and has, for the past fifteen years or so, been working on a solution. In 1987 the Company's founder and then president, Vincent Cuervo, granted it the licence to the "default-proof" method and system, and all patent and proprietary rights to the system.
Since then, the Company has focused primarily on organization, on developing the patented system, and on preliminary marketing activities. Between April 1989 and February 1995, its marketing activities were interrupted by litigation involving the unauthorized use or disclosure of its proprietary information. As a consequence, its cash flow deteriorated.
Patent granted Just recently, however, there has been a breakthrough. A patent for its "Prepaid Debit Cards Programme" that may be purchased over the counter at participating stores worldwide, has been granted. The programme may soon be co-branded by a top credit/debit card company. The card will not require or be linked to a bank cheque account, and it may be reloaded and replaceable. This global, PIN-required, prepaid debit card will be sold over the counters of participating stores using their existing POS terminals. They will also be dispensed from modified ATMs (cash point machines) or bought over the Internet. The company has already been granted a patent for an ATM card dispenser.
Loyalty function coming DPCCS has also applied for a patent on "credit or debit cards of all kinds issued with a bank savings account attached". These cards will be issued with an associated savings account at the issuing bank. Discounts, rebates or cash rewards offered by retailers or service providers may be earned by customers when they use the card. Once earned, the discount, rebate, or cash reward will then be electronically transferred to the bank savings account associated with the card. The cardholder will have control of when and how to use the amounts credited: in US$10 increments, they may be used to increase the stored value of the (debit) card, to reduce the outstanding balance on a credit card, or to cash it in. The bank or financial institution, licensed by DPCCS to issue cards, does not need to carry an open cheque or savings account for the cardholder. These prepaid debit cards might be the cardholder's one and only "bank account."
Industry interest Since the granting of this patent, industry has warmed to the idea: investment bankers, banks, and ATM businesses have all expressed interest - mostly focused on the OTC Prepaid Debit Card.
Not just stored value cards Default Proof President David Koss told The Wise Marketer that the open system stored value prepaid debit cards are not to be confused with closed system stored value or gift cards: there are significant differences between them. Closed system stored value and gift cards generally have very limited functions electronically, geographically and economically and are basically promotional. The prepaid debit card is a full charge card that can be purchased and issued in amounts from $100 to $10,000.
DPCCS hopes that, in the near future, the Resource Prepaid Debit Card and the Internet e-commerce product, ubuydebitcards.com, will be on the market. The patented ATM Debit Card Dispenser should follow soon.