Nigeria is moving to electronic payments via MasterCard Worldwide-branded prepaid cards. In early May 2013, MasterCard reported at the World Economic Forum on Africa that it had entered into a pilot program with the Nigerian National Identity Management Commission for a national identity prepaid smart card.
The pilot, which involves the rolling out of 13 million MasterCard-branded identification payment cards in the West African country, is the largest and broadest financial inclusion initiative of its kind on the African continent, the card brand said. After the registration process is completed, it is expected that over 100 million National Identity Smart Cards will be introduced into the Nigerian population of 167 million.
Financial services comparison site Bankrate.com issued its annual survey of prepaid cards and concluded that, despite a positive trend of decreasing fees, it still can be a perilous, fee-laden market for consumers. Bankrate.com examined 24 of the most prominent prepaid cards to discover "the usual menu of fees – and some very unusual price differentials, underscoring the 'buyer beware' nature of the prepaid market."
Bankrate.com Senior Financial Analyst Greg McBride said the most significant development in the prepaid card industry over the past year was the entry of several large national and regional banks, which he sees as a positive trend. "Many offer cards with low, fixed monthly costs," he said. "The ability to know the total monthly cost in advance is valuable to consumers, particularly with the decline in free checking accounts."
On May 16, 2013, the United States Court of Appeals for the Third Circuit ruled that a so-called recess appointment made by President Barack Obama in March 2010 was unconstitutional. The ruling supports a similar finding made by the United States Court of Appeals for the District of Columbia Circuit in January 2013 based on other "recess" appointments made by Obama in January 2012.
The two rulings support the unconstitutionality of another appointment made by Obama on that same day in 2012 – that of Richard Cordray to head the newly created Consumer Financial Protection Bureau, which has oversight powers over the prepaid card industry.
London-based ABI Research said the increasing popularity of open-loop, network-branded, general-purpose reloadable (GPR) cards is the main driver of growth in the global prepaid card market. The company said GPR cards, such as campus and government benefit cards, will be adopted by consumers at a rate of 64 percent between 2013 and 2018.
Akimbo Financial Inc., a social banking startup that offers a digital wallet with a prepaid card component, said it achieved $850,000 in a round of angel investing. Major participants in the funding included the co-founder and Chairman of Rackspace Hosting Inc. and Akimbo co-founder Tom O. Turner. The new capital will reportedly be used to accelerate Akimbo's marketing efforts and customer acquisition.
At the International CTIA Wireless 2013 held in Las Vegas, hosted bill payment provider BeQuick Software introduced Fusion, a cloud-based, next-generation bill payment platform for mobile prepaid telecommunication operators on the Sprint network. Fusion delivers automated account top-ups and real-time account debiting capabilities, BeQuick said.
Alternative financial services company CARD.com rolled out Visa Inc.-branded GPR cards with artwork from the "Star Trek" television and movie franchise. The card is used under license from CBS Consumer Products.
Mobile gifting platform provider CashStar Inc. said it achieved a nearly 80 percent year-over-year increase in gross sales for Mother's Day e-gifts from 2012 to 2013 and an increase of nearly 70 percent in total number of cards sold one year to the next. Additionally, CashStar reported the growth of e-gifting on its network was six times greater than the year-over-year growth of e-commerce sales in general between Q1 2012 and Q1 2013.
Microfinance lender Grameen America reported it had delivered over 35,000 microloans in five years to women living in poverty. "Typical loans of $2,000 enable members to purchase a sewing machine to start a home-based tailoring business, to buy a small food cart, or to rent a chair in a hair salon to begin providing services," the lender said.
Redwood City, Calif.-based prepaid card processor i2c Inc. launched a new fraud management platform that reportedly provides real-time, multi-event processing capabilities. The company said the platform executes hundreds of fraud rules and complex multi-event checks in real-time before transactions are authorized, rather than blocks transactions only after significant losses have occurred.
Financial literacy advocacy group National Debt Relief posted an article on its website that said fees charged consumers for loading funds onto prepaid cards makes the cards more costly than maintaining checking accounts. But the May 11, 2013, article entitled Revealed - The Dark Side Of Prepaid Debit Cards concedes that prepaid cards are useful for people who have no credit histories or low credit scores and are "a good way of rebuilding one's credit."
United Arab Emirates-based financial services provider Network International launched its Mercury closed-loop prepaid card platform, considered the first such program in the Middle Eastern country. The company said the Mercury platform will enable the acceptance of closed-loop prepaid cards at all of the POS terminals and bank ATMs in its network.
Research firm The NPD Group Inc. reported that prepaid smartphones accounted for 32 percent of all smartphone sales in the United States in the first quarter of 2013. Prepaid smartphone sales have doubled since last year, attributed to a shift by consumers away from postpaid solutions and toward solutions that offer more value, according to the researcher.
As a result of its acquisition of Louisville, Ky.-based HQ Gift Cards Inc., prepaid card processor TransCard LLC released plans to expand its operations in Chattanooga, Tenn. The expansion represents a $925,000 investment and will reportedly create 69 new jobs in Hamilton County.
Dundalk, Ireland-based mobile payment firm Vesta Corp. unveiled the Vesta PayMobile wallet, a smartphone application for prepaid accounts. The company said the mobile wallet is targeted at the 68 million unbanked and underbanked consumers in the United States, the majority of whom use smartphones.
Property insurance software and services firm Enservio signed an agreement with MasterCard to help insurance carriers transition customers from paper-based claims to claims loaded onto prepaid cards. The move away from paper checks will save on costs for insurers and accelerate claim payment delivery to consumers, the companies said.
Mango, a reloadable prepaid card platform operated by Nassau, the Bahamas-based payment processor TSP, contracted with Toronto-based mobile content management system firm retailcommon Inc. to enable Mango merchants the ability to promote discounts, deals and offers to consumers via mobile devices.
TransCard launched the TransCard Xpress Paycard SuiteApp, built using NetSuite Inc.'s SuiteCloud Computing Platform. TransCard said SuiteApp enables 100 percent paperless payroll integrated with the NetSuite Premier Payroll Service. The new service benefits workers by providing greater security, convenience, and control, according to TransCard.
Digital money transfer provider Xoom Corp. and mobile payments firm Vesta are jointly offering international money transfers via mobile devices. Users of the Vesta PayMobile wallet now have access to Xoom's money transfer services directly from smartphones.
Online gift card specialist GiftCards.com agreed to acquire mobile gifting app developer Giftly. "The Giftly acquisition is a logical and exciting step into building the industry's future with an established partner in the fast-growing m-commerce space," said Jason Wolfe, Chief Executive Officer of GiftCards.com. The price of the proposed acquisition was not disclosed.
GroupGifting.com's social and mobile gifting business eGifter hired Andrew Dodge as its new Vice President of Sales. Dodge, former Vice President of Business Development at global business-to-business gift and prepaid card distributor SVM LP, is tasked with driving demand among retailers and payment channel partners for the eGifter Platform.
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