Global Payout Inc., a prepaid program manager based in SanDiego, Calif., announcedthat it has received approval from MasterCard to launch a Chip and PIN prepaidcard.
This new Prepaid MasterCard® debitcard program is based upon the EMV standard. This same Chip and PIN technologyhas effectively demonstrated a significant reduction in the multi-billions ofdollars lost to fraud and security breaches each year. The United States israpidly moving to make the Chip and PIN Technology mandatory by October, 2015and this move positions Global Payout and NIB as early leaders in the move tomeet the October date.
The move in the United States to chip cards and away frommagnetic stripe cards is a concern for prepaid suppliers. Because the cost ofthe cards will go up when a chip is added, many prepaid suppliers plan to waitas long as possible before making the switch. They are hoping to find ways toincrease the average card life of their portfolios so that that the churn rateof chip cards does not squeeze their margins.
For more on prepaid and the risk of the EMVconversion, please see Mercator Advisory Groups research viewpoint “EMV Hazardsfor Prepaid”
Overview by Ben Jackson, Director, Prepaid Advisory Service, Mercator Advisory Group
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