They remained as an unknown financial product in tier-2 and tier-3 cities as any other plastic cards until as recently as last month. But thanks to demonetization on November 9, prepaid cards have all of a sudden become apple of every company’s eye employing unorganized workers. Banks have been reported to have ordered thousands of prepaid cards, which would be distributed from next month for those unorganized sector workers having no bank accounts yet.
“Had the demonetization not taken place, a daily wage earner in cities like Ramgarh and Barkakana only to name a few could ever feel the touch of a prepaid card or swipe machine for at least another ten years.
But we have distributed 200 prepaid cards only for Ramgarh on Wednesday as pilot project, though prepaid cards have no issues at all,” said Punjab National Bank (PNB) Ranchi Circle DGM PK Pradhan on Thursday.
As far as financial utility products are concerned, prepaid cards have been in market for over a decade in our country, but mostly confined to metro cities due to lack of awareness about them in smaller cities. Anyone willing to experience a ride in Delhi Metro while being in Delhi can get a chance to come across a prepaid travel card as it offers discount to commuters using prepaid cards. State Bank of India (SBI) has as recently as last month launched travel prepaid card in Chennai, while many other banks have been already using prepaid cards for various purposes.
Prepaid cards are similar to debit and credit cards of any banks in similar shape and size.
The only difference between a debit/credit card and a prepaid card is that a prepaid card doesn’t carry holders’ name imprinted on it and it comes with pre-loaded amount in it. It is also not attached to any account and is ready to be used like a debit card at any shop having a card swipe machine. They can be recharged at bank counters or from the company outlet which issues it just like a customer gets his prepaid phone number recharged.
“We have ordered over 10,000 prepaid cards for Ranchi Circle itself, and entire number of such cards for the State may easily cross 45,000-50,000 in this financial year itself for the bank,” said Pradhan. He said that the demand of prepaid cards might increase in future seeing their variety of uses in metro cities.
Allahabad Bank also said that it was in process of acquiring around 2,000 prepaid cards for Ranchi Circle itself.
“We are ready to distribute such cards from as early as first week of next year. It will cater largely to unorganized sector labourers who don’t own a bank account yet,” said bank DGM (Ranchi Circle) SK Singh.
The diverse uses of prepaid cards have made it popular in metro cities like Bangluru, Mumbai, Delhi and Pune.
“Companies have started using prepaid cards as gifts to their employees at occasions who can further easily gift them to their loved ones down the line. Retail stores and petrol stations have started using preloaded exclusive prepaid cards to be used at their petrol stations anywhere in the country.
The good part of the prepaid card is that unlike debit cards, it can be used by whosoever holds it,” said Singh.
But this freedom alone is also the only hurdle associated with the prepaid cards. “You needn’t use any PIN like in case of debit or credit cards and anyone can use it. User-friendliness of the prepaid cards is the only enemy of it.
This is what we are thinking at present whether it should be protected with a password or not,” said Pradhan.