Prepaid cards - PowerPoint Presentation

Slide1

Prepaid cards – a solution for the financially excluded?

The

National Prepaid Cards

Network

Colin

Whitehouse

Independent Govt. Advisor

Chair – National Prepaid Cards

Network

c

olin.whitehouse@sulion.co.ukSlide2

National Prepaid Cards Network

Created in May 2011

Independent group, supported by MasterCard

Network meetings and events held across the countryOver 100 organisations involved, together with supply partners Assesses sector requirements and captures best practiceShares best practice, issues and problems for mutual benefit Suppliers are able to better shape their products to meet true market needsCurrent focus is on Council services, Universal Credit and NHS Personal Health BudgetsSlide3

How do prepaid cards help to transform services?

-

b

ecause they address all four principles of successful service redesign

Prepaid cards are proven to improve the lives of customers, increase staff morale, reduce costs and eliminate errors

- Helping to spend more budget on service delivery and reducing unnecessary costs

Understanding the needs of customers, what works well for them and what they don’t like

Understanding the perspective of the people who deliver the service from day to day

Identifying the causes of wasteful work that is done e.g. trying to correct ‘failures’ in effective service delivery & reduce unnecessary customer strain

Understanding the performance of the process of delivery by measuring how well it delivers what customers wantSlide4

What are Prepaid Cards and how do they work?

Funds are uploaded onto card by

Council, funding organisation

and/or service userCards can be then used in a similar way to credit/debit card, but:ATM/cash back use is often blockedSpend can be restricted by merchant or by categoryBalance cannot fall below zeroDirect Debits and Standing Order facilitiesService Users can monitor transactions and balances onlineTelephone support can be provided by card supplierCouncils sometimes have access to transaction level detailsSlide5

Main business benefits

Replaces cash handling - safer and more secure

Good management information (the no.1 benefit)

Makes more effective use of staff timeSupports personalisation and commissioning agendasMonitored spend leads to better outcomesEasy to track client contributionsPossible income generation opportunitiesNo major IT investment requiredSlide6

Main service user benefits

Prepaid cards are generally available to all, regardless of financial

circumstance

many potential benefits for those financially excluded No need to carry and manage cashPromotion of life skills / social inclusionAccess to better services and lower online pricesQuicker access to fundsEasy monitoring and management of balancesFunds cannot be ‘lost’ by disappearing into an overdraftSlide7

What people say“

Prepaid’s

so much better for me, I don’t have to worry about it at all. I used to get real anxiety attacks, I couldn’t deal with the paperwork.”“for us it’s been a plus, ‘cause to manage it for my dad, I can show him statements show him how everything’s paid”“you can chose your own support. If don’t like the agency you can move or find someone privately”“If I have any problems I always phone LBM [Merton Council]. They’re brilliant.”Slide8

Using prepaid cards to aid financial inclusion

Cards generally available to all

Ability to track spending and manage financial affairs

Can be advised by email or text when a payment has been received onto the prepaid cardAutomated payments to aid budgeting and financial managementPayments to different family members can be combined onto one card to ease budgetingFreedom of choice, better access to online services and goodsImproves safeguarding and reduces the potential abuse of fundsNo credit line, and funds received don’t disappear into existing overdraftsSlide9

Typical categories of use

Direct payments

Adult social care, d

isability allowances, young people leaving careBudget management and monitoringPetty cash replacement, travel expenses, vouchersInstant issueCards can be loaded instantly 24/7Children’s services, asylum seekers, staff paymentsCouncils can carry a stock of cards for emergency useSlide10

Typical business uses

Solving service user based problems

Unbanked service users - replaces cash

And unbanked users can pay 8% to cash chequesMonitoring appropriate spend of fundsEasy reporting of transactional use, automatic triggering of reportsReplaces the chasing and processing of paper bank statementsTaking back funds when necessaryFunds can remain property of the issuing Council until spentBetter information allows effective service/demand planningAs an employerPayments to temporary or agency staff, assistance/relocation paymentsTravel and other expenses, Elected Member expenses become instantly transparentReplacing petty cash in catering, housing repair etc.Slide11

Case study: Personal budgets

Lancashire County Council

£2m savings from £40m direct payments budget

Use of prepaid cards is mandated for all new recipients*Plan to have all 3,000 direct payments recipients using prepaidEffective use of small teams, reduces need for additional staffRisk management based use of information should halve the need for visitsTypical usage:Cards loaded by BACS transfer as an alternative to a holding accountService users load funds by SO or transfer, by phone or internetCards can be used by nominated carer / assistant / social workerRecurring payments can be made by DD/SOSlide12

Case study: other examples from the Network

Directed activities for young people

Service user payment to day care and supported employment providers

Personal expenses for clients in residential accommodation / in receipt Court of Protection ordersReplacing handling of cash for: Young people leaving careAsylum Seekers – Looked After ChildrenEmergency paymentsOne NW Council estimates savings of 4 FTE’s simply by not handling cashSlide13

Some frequently asked q

uestions

- 1

Ownership of the funds is determined by the Council and affects the configuration of the schemeIf a client dies then a predetermined process is designed to handle repaymentsMoney laundering regulations are satisfied by Council based identity verificationCards issue may be prevented by:AgeInability of client to pass ‘Know Your Client’ checksBeing on either a sanctions or politically exposed persons listSlide14

Some frequently asked q

uestions

-

2Usage can be restricted by enabling or blocking Merchant Category Codes and/or ATM use during setup phaseUse of active cards can be instantly blocked if necessaryPrepaid cards can be used a smart cards for a range of servicescosts are currently quite high but expected to fall significantlyTypical transaction detail:Time of transactionMerchant descriptionValuePrepaid card data can be integrated into existing financial systems in a number of ways (some very simple)Slide15

Prepaid Cards - guidance resource

Specification based on what Councils said they need, or would have liked to have known before they started

Content based entirely on the experiences of Councils who have implemented schemes or are in the process of doing so

Programme Managers contributed their experiences of implementation and practical issuesAdvanced Payment Solutions (APS), Prepaid Financial Services (PFS) and othersNetwork members provided documentation to create a supporting online resourceSlide16

Contents of the guidance document

What are Prepaid cards and how do they work?

What typical business benefits can they deliver?

How would our clients benefit?How much do they cost to operate?Where might they be used?Case StudiesIn which other service could they be used?How do I create the outline business case?How do I arrive at my current costs?FAQsSlide17

Examples from the online resource

Guide to the use of Prepaid cards for service users

Cardholder agreements

Council / Direct Payments agreementPrepaid cards business caseOptions appraisal reportProject Initiation DocumentTender specificationMarketing brochuresSample Invitation to TenderSample Pre Qualification Questions…………. and moreSlide18

Looking at new uses via Special Interest Groups

Universal Credit

Potential to use prepaid cards for a proportion of UC recipients to enable them to receive funding electronicall

y and better manage their financesDevelopments may include multiple ‘wallets’ on a single cardCurrently being trialled by housing associations and credit unionsPersonal Health Budgets (PHBs)All recipients of continuing healthcare have the right to a PHB by April 2014Potentially £2.5bn available by PHB’s by April 2015Clinical Commissioning Groups have no experience of handling direct paymentsPotential for Councils to deliver the service on behalf of CCG’sSlide19

Prepaid cards - Improve service : Reduce cost

“

Prepaid cards are a great way to get things done, they’re easy to use and safer and more secure than cash

” – London Borough“Prepaid cards allow us to focus on monitoring high-value processes, they allow all Council departments to manage more effectively” – London Borough“I’ve been able to take responsibility for my entire budget by using the Prepaid card for activities and equipment” – County Council Care Leaver

Questions?Slide20

Discussion Session

Do you have any experiences of Prepaid cards

?

Which problems faced by the financially excluded might be solved by their use of prepaid cards?What are the biggest problems which might slow down the introduction of prepaid cards?What can the network and/or suppliers do to help?Are there any prerequisites (support/services) that first need to be put in place?