Visa prepaid cards to be reloaded in retail stores

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By: Wise Marketer Staff |

Posted on March 22, 2006

Visa prepaid cards to be reloaded in retail stores

Visa USA has introduced the 'Visa Prepaid Load Network', a new service that allows consumers to purchase and add funds to Visa reloadable prepaid cards at participating merchant locations throughout the USA.

The Visa Prepaid Load Network is expected to help Visa's member financial institutions to meet the needs of underserved customers. In fact, according to Visa's own estimate, there are some 80 million consumers in the US who lack access to plastic payment cards, or who are without a traditional banking relationship. This consumer segment receives approximately US$1 trillion in annual income, pays an estimated US$1.5 billion annually in cheque-cashing fees, and relies primarily on cash for everyday transactions.

So, while direct deposit is the primary method many cardholders use to fund reloadable Visa prepaid cards, Visa's research found that they also want the flexibility to add funds to their cards at regular shopping locations, such as supermarkets and drug stores. According to Todd Brockman, senior vice president of prepaid products for Visa USA, "The Visa Prepaid Load Network offers an infrastructure to respond to a direct need in the marketplace."

Opt-in service The Visa Prepaid Load Network is an opt-in service for issuers, acquirers and merchants. Using VisaNet connections, transaction message formats, and settlement processes, the service allows consumers to add funds to eligible Visa reloadable prepaid cards at a merchant's checkout counter, as follows:

  1. The cardholder presents the participating merchant with a Visa reloadable prepaid card and the funds to be added;  
  2. The merchant transmits the card details and amount to its acquiring bank;  
  3. The acquiring bank routes those details to the card issuing bank for approval (via VisaNet);  
  4. The card issuer approves the transaction in real-time (for eligible prepaid card accounts);  
  5. The cardholder is presented with the card and a receipt, and gains immediate access to the new funds;  
  6. Finally, the acquiring bank settles the funds with the card issuing bank on a daily basis.

Participant benefits According to Visa, the network provides a number of benefits for all its participants, including:

  • Merchants stand to increase consumer visit frequency and store traffic from consumers who are directed to merchant locations to reload their card. Merchants are also expected to benefit from potential card reloading fees.  
  • Cardholders can add funds to their Visa prepaid cards at convenient retail locations.  
  • Issuers should benefit from the expansion of existing Visa prepaid card programmes, and from the development of more profitable cardholder relationships.  
  • Acquirer banks have a new service to offer merchants, and will also benefit from incremental revenue in the form of an interchange fee paid by the card issuer to the acquirer.

The initial Visa member and merchant participants are expected to introduce the service in late 2006 and early 2007.

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