MasterCard to launch prepaid spending card next month |
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Sat, 17 Sep 2005 11:05
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LONDON - MasterCard Europe has announced that it would be launching a pre-paid card called Cashplus next month in the European market. The world's leading credit card provider has joined hands with Advanced Payment Solutions in this venture.
The cards will work in many ways like the ubiquitous pre-paid mobile phone. Users will just have to charge the card by paying money and then continue to use it as usual. It is estimated that two million households in Britain do not have either a savings account or a current account. The pre-paid card will target this segment.
"There are nearly 8 million people in the UK without a bank account or a credit card and this is the market we are aiming at. These people can't buy goods over the Internet, can't reserve hotels or hire cars and if they lose their money it is gone. With the card it is secure," said Rich Wagner, chief executive of APS. "It will be of particular benefit to people previously financially excluded and those with poor credit ratings."
With the new card, users can withdraw cash from the ATM, shop for goods, purchase them over the Internet or simply pay their restaurant bills. "The potential for these cards is endless, they can be used as a straight cash card or can be adapted for specific purposes, such as for the gift card market or replacing traveller's cheques. The key is the flexibility and fuelling the growth of prepay cards is essential to realizing our vision of a truly cashless society," said Phil Davies, director of business development at MasterCard Europe.
These cards have already had a phenomenal success in the United States. MasterCard and APS would be hoping that the same story repeats here as well. Analysts were divided in their opinion about the feasibility of these cards The National Consumer Council welcomed this move, Because people can only spend the money they've put on their card, there is no risk of racking up debt," it said in a statement.
But Sandra Quinn, director of communications at Apacs, was not so sure that the US story would be repeated here, "I can't see Brits being willing to pay for the cards when the majority of people can already qualify for basic banking facilities at least. If they don't qualify for that, then I think they'd prefer cash," she said.
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