pre paid visa debit cards by rickman3

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									Prepaid Debit
A guide to better understanding

 This guide will help you to understand the
 basics of Prepaid Debit cards, to ensure that
 you can make the right choices when your
 program is designed.

             IM T C a r d L L C
             Version: 1.0
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Table of Contents

What is a Prepaid Debit card?                3

What can a Prepaid Debit card be used for?   4

What are the benefits?                       5

Card Types                                   6

Networks                                     7

Understanding pay ment transactions          8

Loading the Card                             11

Getting funds off your card                  12

Card distributions                           13

KYC rules                                    14

Country limitations                          15

Card design & embossing                      17

               IMT Card LLC
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What is a Prepaid card?
The prepaid card is far from a
new idea. How many of us have
used a prepaid phone card, a
prepaid gift card or a prepaid sim
card? The concept is basically the
same. You load money on to a
card that can then be used at
retailers and online merchants. It
can even be used to pay your bills and top up your mobile phone, and
you can withdraw cash with the prepaid card at ATMs.
Money can be loaded on to your prepaid card by cash, bank transfer,
credit card, or any other available method and because it can be a Visa
or MasterCard you can use it anywhere in the world.
Prepaid cards generally have the same uses as a credit card, so much so
that they are commonly referred to as ‘prepaid credit cards’. However,
there is a difference. A prepaid card is completely powered by your cash
and therefore the money you have in your prepaid account is the money
you have to spend. This means there is no risk of running into debt.
There are no credit checks and no interest to pay. Consequently, rather
than referring to it as a prepaid credit card, a better description would
be a prepaid debit card.

               IMT Card LLC
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What can a Prepaid card be used for?
The prepaid card has no shortage of uses, including:

  •   Topping up your mobile phone

  •   Buying groceries and petrol

  •   Internet shopping

  •   Making flight and hotel reservations

  •   Paying bills

  •   Transferring money to friends and family

  •   Withdrawing cash from an ATM

Please note that the uses of the card are dependent upon the design

structure of the program.

               IMT Card LLC
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What are the benefits of using a
Prepaid card?
There are numerous benefits to

the prepaid card. These include:

  •   Accessibility - There are no

      credit checks, which

      means you can get a card

      without worrying about

      your credit history.

  •   Safety – Carrying a card

      can be safer than carrying cash and you can never spend more

      than you have.

  •   Control - prepaid cards are an ideal way to control spending.

      Like a credit card you get a full breakdown of spending on the

      card so you can see what has been purchased.

  •   No debt risk -With a prepaid card there is no chance of

      spending too much as you are limited to the amount you put

      on your card.

  •   The card for travel - As well as being able to top up the card,

      depending on the specific provider, you will be able to use it at

      ATMs worldwide.

               IMT Card LLC
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Card Types
A magnetic stripe card is a type of card
capable of storing data by modifying the
magnetism of tiny iron-based magnetic
particles on a band of magnetic material
on the card. The magnetic stripe,
sometimes called a magstripe, is read by
physical contact and swiping past a
reading head. Smart cards are a newer generation of card containing
an integrated circuit chip. The card may have metal contacts
connecting the card physically to the reader.
A smart card, chip card, or integrated circuit card (ICC), is defined
as any pocket-sized card with embedded integrated circuits which
can process information. The international payment brands
MasterCard, Visa, and Europay agreed in 1993 to work together to
develop the specifications for the use of smart cards in payment
cards used as either a debit or a credit card. The first version of the
EMV system was released in 1994. In 1998 a stable release of the
specifications was available. EMVco, the company responsible for the
long-term maintenance of the system, upgraded the specification in
2000 and most recently in 2004. The goal of EMVco is to assure the
various financial institutions and retailers that the specifications
retain backward compatibility with the 1998 version.
EMV is a standard for interoperation of IC cards ("Chip cards") and
IC capable POS terminals and ATM’s, for authenticating credit and
debit card payments. The name EMV comes from the initial letters
of Europay, Mastercard and VISA, the three companies which
originally cooperated to develop the standard. Europay International
SA was absorbed into Mastercard in 2002.JCB (formerly Japan Credit
Bureau) joined the organisation in December 2004. IC card
systems based on EMV are being phased in across the world,
under names such as "IC Credit" and "Chip and PIN".

               IMT Card LLC
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An interbank network, also known as an ATM
consortium or ATM network, is a computer
network that connects the ATMs of different
banks and permits these ATMs to interact
with the ATM cards of non-native banks.

Cirrus is a worldwide interbank network. It links MasterCard,
Maestro, Diners Club credit, debit and prepaid cards to a network of
over 1,000,000 ATMs in 93 countries.

PLUS (also known as Visa PLUS) is an interbank network that covers
all VISA credit, debit, and prepaid cards, as well as ATM cards issued
by various banks worldwide. Currently, there are one million PLUS-
linked ATMs in 170 countries worldwide.

              IMT Card LLC
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Understanding Payment Transactions
Payment transactions take place
every minute of every day in
every corner of the world.
Consumers, businesses and
merchants increasingly rely on
Payment systems to conduct safe
and convenient commerce.

The Two Stages of a Typical Transaction
A typical transaction involves two stages – authorization, and
clearing and settlement.
Authorization is the process of approving or declining a transaction
before a purchase is finalized or cash is disbursed.
Clearing is the process of delivering final transaction data from an
acquirer to an issuer for posting to the cardholder’s account, the
calculation of certain fees and charges that apply to the issuer and
acquirer involved in the transaction, and the conversion of
transaction amounts to the appropriate settlement currencies.
Settlement is the process of calculating, determining and reporting
the net financial position of the issuers and acquirers for all
transactions that are cleared.

               IMT Card LLC
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How a Transaction Is Completed

A transaction begins when the cardholder presents his or her card to a
merchant as payment for goods or services. The transaction information
is then transmitted electronically to the issuer for authorization. The
following diagram illustrates the processing steps involved in a typical

transaction authorized through a network.

  1. The cardholder presents the merchant with a card for payment.
     The merchant point-of-sale terminal reads the account number
     and other data encoded on the card’s magnetic stripe or chip.
  2. The merchant terminal transmits the card information and
     transaction amount to the acquirer.
  3. The acquiring bank or its third-party processor combines the
     transaction information into an authorization request message and
     transmits it to Visa or MasterCard.
  4. Visa or MasterCard routes the authorization request to the issuer
     for review.
  5. The issuing bank or its third-party processor sends to Visa or
     MasterCard an authorization response message either approving or
     denying the transaction.
  6. Visa or MasterCard routes the authorization response to the
  7. The acquirer transmits the result of the authorization request to
     the merchant terminal.

              IMT Card LLC
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Clearing and Settlement
Clearing occurs at the time of the authorization for single-message
transactions, or in a single daily batch message containing all transactions
reported by the acquirer for dual-message transactions. Settlement occurs
on each business day and is conducted on a net basis for all transactions
submitted during the previous settlement cycle. The following diagram
illustrates the clearing and settlement process between the issuer and
acquirer for a typical transaction processed through a system.

  1. The merchant transmits sales draft information for the transaction,
     including account numbers and transaction amounts, to the acquirer.
  2. The acquiring bank or its third-party processor formats this
     information into a clearing message, which it transmits to the
     appropriate Network.
The Network routes the clearing message to the card issuer and calculates
the settlement obligation of the issuer and the amount due to the acquirer,
net of certain applicable fees and charges.
  4. The issuer sends funds to the Network’s designated settlement bank
     in the amount of its settlement obligation.
  5. The settlement bank, at the direction of the Network, transfers funds
     due to the acquirer.

              IMT Card LLC
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Loading the Card
IMT Card has developed alliances
with many 3rd party processors and
sponsoring banks, providing the
most extensive international load
options available today. Giving you
complete access to monetary
transfers all throughout the globe.
IMT is able to offer various card loading methods which can easily be
integrated with the card platform. Most notably, IMT and Gosmo
have jointly developed the ultimate monetary transfer solution,
enabling consumers to make purchases and load their card via sms
technology. By integrating the two technologies we are able to
provide a quick, cost effective remittance solution for companies and
Some of the more common load methods are listed below, please
note that not all options are available on each card program.
  •   Bank transfer
  •   Credit card load
  •   Cash load
  •   Sms loading
  •   Batch loading
  •   Direct Deposit
  •   EFT/ ACH loads
  •   Card-to-card transfers

               IMT Card LLC
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Getting funds off the card
 Prepaid cards can either be ATM
 cards, or prepaid debit cards. ATM
 cards run only on an interbank
 network such as Plus or Cirrus.
 These cards can be used at ATMs
 but cannot be used at POS
 terminals. Prepaid debit cards
 generally carry the same features
 as a standard debit card, with
 integrated functions available.
 Prepaid debit cards are commonly being developed with features
 such as online functionality, where the card can be used just like
 a credit card, and sms remittance.
 •   ATMs

 •   POS

 •   Online purchases

 •   Telephonic purchases

 •   Transfers to Bank accounts using sms technology

 •   Transfers to other Prepaid Debit cards, not limited to the


               IMT Card LLC
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Card Distributions
Cards can either be issued instantly

(face-to-face) or mail ordered. All

cards need to be activated either
online or via the telephone, where

possible, this is to assist in the

prevention of money laundering in

compliance to regulations.

Cards will commonly be ordered as

the KYC documents need to be

verified. The verification of documents

or details supplied by a card holder is generally completed by the
card manager. Cards are shipped by standard post or alternatively

can be shipped via a courier company such as FedEx.

Cards may only be actively marketed in countries where the issuing

bank has a banking license, passive marketing can be used in

countries where no banking license is held, this is done in most

cases by potential card holders becoming members of an

organisation (a simple online registration may be used) before they
are offered the card.

Cards cannot be distributed to a card holder who resides in a
blacklisted territory. For more information on which countries are

barred please refer to page 15 of this presentation, Country


               IMT Card LLC
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What is it?

Know Your Customer (KYC) is the
due diligence and bank regulation
that financial institutions and other
regulated companies must perform
to identify their clients and ascertain
relevant information pertinent to
doing financial business with them.
Know your customer policies have
becoming increasingly important globally to prevent identity theft
fraud, money laundering and terrorist financing.

How it affects your program

The intensity of the KYC requirements are, in most countries,
dependant on the features of the card program, the primary function
of the card program and the transaction limits placed on the card.
For programs with a low risk assessment the cards can be issued
instantly and even be anonymous. For most card programs some
form of KYC must be collected, this however allows the program to
have much higher transaction limits, great features and allows the
card to be embossed with the card holders name.

               IMT Card LLC
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Country Limitations
FATF Non co-operative territories
(commonly known as the FATF

•   Syria                •     Libya

•   Myanmar (Burma)      •     Sudan

•   Nigeria              •     Iran

•   North Korea

List of Drug producing and drug conduit countries—2005:

•   Afghanistan          •     Jamaica             •   Bahamas

•   Laos                 •     Bolivia             •   Mexico

•   Brazil               •     Nigeria             •   Burma

•   Pakistan             •     Colombia            •   Panama

•   Dominican Rep.       •     Paraguay            •   Ecuador

•   Guatemala            •     Peru                •   Haiti

•   Venezuela            •     India

Note: The list of drug producing and drug conduit countries is not a
blacklist and we are not suggesting that no business should be done
with these countries; however attention is drawn to the increased
possibility of drug related crime and laundering.

                IMT Card LLC
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Other Government Country warnings:

•   Nigeria (FinCEN 2002)
•   North Korea (FinCEN 13 December 2005)

Designated Country as a “primary money laundering

•   Burma

•   Nauru

List of sponsors of terrorism:
•   Iran                         •   Sudan
•   Libya                        •   Syria
•   North Korea                  •   Cuba

Banks will not facilitate business with any Merchant or
Cardholder located in a blacklisted country or who are
sponsors of terrorism.

               IMT Card LLC
            Page 17

Card Design and Embossing
15 square centimeters of plastic can be
the most influential piece of branding
your company owns. Personalised Debit
Cards offer a marketing niche, which is
designed to communicate your brand's
values in a highly personal and engaging manner.

                           The card is a constant reminder of the
                           service and benefits that your company
                           provides. Have your card completely
                           personalised and branded with your
                           corporate signature by our professional
                           design team, or submit your own design
and start building brand awareness and customer loyalty today.

All custom-branded cards must identify
the issuer name and be formatted
according to strict specifications. IMT can
create multiple card designs and card

Embossing is the process of creating a three-dimensional image on
the card. Cards can be personalised with the card holders name
using embossing. Embossed cards cannot be issued instantly to the

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