Merchants in the United Kingdom stand to benefit more so than will consumers from a new contactless prepaid card that will allow either to spend or withdraw from their PayPal accounts without first transferring the funds to a bank account.
PayPal Inc.’s Access Prepaid MasterCard enables merchants and consumers to access PayPal accounts at ATMs or point-of-sale terminals, Rob Skinner, a PayPal UK spokesperson, tells PaymentsSource.
The new EMV chip-and-PIN card replaces the previous PayPal UK Top Up Card, which provided relatively less access to PayPal accounts, Skinner says.
“The access card gives direct access to the accountholder’s PayPal account,” Skinner says. “It can be held by a merchant or consumer, although it’s particularly useful for businesses, as the merchant can now spend money from his PayPal account that he has received for sales in-store or online.”
A merchant cardholder who receives a PayPal payment can spend or withdraw the funds from his account immediately with the card, usually to make purchases for his business, because there is no need to transfer the value to a bank account, Skinner adds.
PayPal has “invited” select PayPal merchants and consumer customers to use the new card during an initial phase of the product launch, Skinner notes.
Consumers may make purchases with the card at any location where MasterCard is accepted. The card contains a PayPass radio frequency identification microchip to support “tap-and-go” payments without requiring a PIN for purchases less than £15 (US $24), the PayPal website notes.
Cardholders have the option to manage their accounts through a PayPal online portal, the website adds.
But PayPal, a unit of San Jose, Calif.-based eBay Inc., figures eventually to expand the use of the card.
The new card represents “a great option for businesses and other sellers on eBay and other websites,” Apur Shah, PayPal head of consumer and credit products, noted in a company press release.
Indeed, merchants likely will enjoy being able to use the funds in the card account more quickly than will consumers, Zil Bareisis, a London-based senior analyst for research firm Celent, tells PaymentsSource.
“If you never accept money and only use PayPal to pay, the card is not as useful to you,” Bareisis reasons. “But if you have money sent to you into your PayPal account, either by your friends or by customers, then it’s a good way to access those funds when needed.”
Small merchants who accept PayPal payments should view the access card as great news, Bareisis says. “It gives them much more flexibility in accessing their funds,” he notes.
PayPal sent letters to merchants several months ago, alerting them that the traditional top-up card would be discontinued, Bareisis says.
MasterCard’s understanding of the prepaid card market is evident because the company has generally been active in pursuing prepaid card partnerships, Bareisis suggests. “Given that most banks in the UK continue to ignore prepaid, that space is largely left to nonbank providers, such as PayPal,” he says.
MasterCard executives in the UK were not available for comment.
PrePay Technologies Ltd. issues the PayPal card. MasterCard owns 33% of PrePay Technologies, while Edenred, formerly known as Accor Services and a provider of prepaid vouchers, owns the remaining 67%, Bareisis says.
PayPal has increased its exposure at the point of sale in the United States as well. The company recently partnered with Home Depot USA Inc. to create point-of-sale payment options for PayPal account holders (
The concept of using a prepaid card to hold merchant sales receipts is relatively new. Intuit Inc. late last year began offering such a product for merchants that use its GoPayment mobile card reader to accept payments (
What do you think about this? Send us your feedback.
