Cashiers now may activate entire packs of cards at once instead of swiping each card individually under a service First Data announced July 11.
The Atlanta-based processor sees a need for the service among companies that buy prepaid cards in bulk to pass out at sales meetings or when parents distribute them as party favors for a child’s birthday celebration, Dan Farrell, vice president of card products and services in First Data’s Prepaid Solutions Group, tells PaymentsSource. Historically, most companies and consumers have purchased prepaid cards in bulk online and waited for delivery, he says.
A single code number activates all of the cards in the pack at the point of sale, Farrell says. Packs could contain any number of cards, but the actual count would depend on what makes sense to the retailers offering them. The technology works with open- and closed-loop cards, Farrell says.
Retailers may find it simpler to sell packs of 25 cards than of a hundred, Farrell says. Plus, swiping four packs of 25 cards each for a customer who wants a hundred would not require an undue amount of effort, he adds.
Bulk activation makes sense for the business-to-business market, says Ben Jackson, senior analyst in the prepaid advisory services unit of Maynard, Mass.-based Mercator Advisory Group.
“No one wants to stand there for half an hour to pick up cards to use as rewards at the company Christmas party,” Jackson says. “You’re simplifying the process for those people.”
Retailers have been able to activate two or three cards at a time for a while, so simultaneous activation of a larger number of cards does not constitute “a huge step forward,” Jackson says. Just the same, it represents a “logical step,” he says.
The technology appears likely to come to large national retailers first mainly because trends tend to break in that way, Farrell says. However, smaller retailers also could use it, he adds.
Some retailers are testing bulk activation to see how it fits into their operations, Farrell says. The technology itself requires no additional testing, and First Data can make it available to any company that requests it, he notes.
Mom-and-pop coffee shops and local children’s attractions, such as trampoline parks, are among the types of local retailer types independent sales organizations might target in selling bulk activation of prepaid cards, he acknowledges.
Bulk activation falls under the same rules as conventional activation in terms of money-laundering concerns, meaning that retailers would have to take no additional precautions, Farrell says.
The technology required no special hardware, Farrell says. Many POS systems already are compatible with the technology, while others would require some adjustments to accommodate it, he says.
