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Prepaid card/Scratch card process

Many companies have prepaid cards where it can either be magnetic or scratch cards with serial codes/pins. My question is what are the ways to achieve that if I were to use such system for my company? Most likely scratchcards. Be it:

  1. Hiring a card company to do that
  2. Buying a card printer to do it in-house etc

What are the pros and cons? Thanks ahead.

Edit: For example, Customer buys a scratch card, he types in the PIN. That gives him some credit(virtual currency ) in our system and allows him to buy our products online. Famous example would be League of legends prepaid cards, gamestop gift cards etc. Note that I don’t mean visa gift cards. This is only for one specific product / company.

Answer 1522

Firstly, you need to calculate ALL the costs involved in producing the scratch cards which would include

In-House

  1. Estimated cost of cards (based on volume per month for example)
  2. PIN Management
  3. Cost of printers, Ink, Maintenance
  4. Manpower (operations, inventory, distribution)
  5. Physical storage space (warehouse, if applicable)
  6. Transportation (vehicles, fuel)
  7. Insurance (theft, fire, vehicles, etc.)

Outsourced

  1. Cost/card (delivered to your premises)
  2. Manpower (inventory, distribution)
  3. Insurance, Transportation, Physical Storage space

Another option that many companies use is “Electronic Vouchers”. This basically avoids the physical hassle and delivers an e-voucher via the POS terminal of retailers

Electronic top-up shows several advantages: No cost for creation, distribution and management of a physical card and no risk of fraud or theft. The distribution of PINs occurs through an electronic connection with the POS terminal where the customer pays the retailer once the transaction is completed.

Read more about these options here

http://en.wikipedia.org/wiki/Electronic_reloading

http://blucloud.esteltelecom.com/blucloud-e-voucher.html

Answer 1530

You’re lucky that the scratchcard industry is very mature, so you can easily find companies that will offer you a full spectrum of choices from fully outsourced to totally in-house where you buy equipment, use your own code generators and distribute for yourself.

For most start-ups, I would recommend starting with outsourcing production, code generation and activation but managing distribution for yourself. That’s because if nobody has heard of you yet, you are going to have to go direct to retailers and perhaps sell online until you build presence.

If you are inclined to manage the whole thing yourself, you need to be aware that the big stretch day one is risk management. Because a resold scratchcard has a monetary value as well as a value tied to your platform, your processes need to eliminate all major fraud and theft issues by design. The purchase of a capable security printer is only a small part of your total investment of time and cash this would entail.

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