A payments technology provider is enabling acquirers, independent sales organizations and agents to offer a prepaid MasterCard to their merchant customers and share with them a portion of each purchase.
The MerchantCard, which My Clear Reports has added as another service to its MCR virtual business center for merchants, provides the reseller 0.25% of each PIN- or signature-debit purchase.The merchants also receive the same amount in cash back for signature-debit purchases, Dino Sgueglia, My Clear Reports president and CEO, said in an interview Aug. 29.
(A spokesperson later said in an email that under the Durbin amendment, “it’s too hard and confusing to manage cash back with PIN because you have to charge the merchant first and then give them the cash back, which really defeats the value.”)
"It allows our clients to lower the discount rate without actually lowering the discount rate," he says.
Merchants may deposit their own funds into a virtual bank account that's tied to an actual card using the MasterCard Reload or Green Dot networks. They also may choose to deposit their daily card receivables into the prepaid card account, which can hold up to $150,000, Sgueglia says.
Merchant Rewards Network, which does business as ProjectPrepaid, is providing the card issuing and processing support behind the MerchantCard, Sgueglia says.
Adding the card to the business center provides another way ISOs, agents, processors and acquirers can make more money from their merchant portfolios, he says. My Clear Reports' clients pay between 75 cents and $1 per merchant per month, depending on the number of merchants they have in their portfolios, he says.
Through My Clear Reports' virtual business center, merchants may order and activate cards, manage expenses, pay bills, and load and transfer funds. The business center also provides integrated website access to custom reporting on payments data, business analytics and online monthly statements, as well as Payment Card Industry data security standards compliance certification, Internal Revenue Service 1099-K reporting and sales tax filing tools.
"There's no other tool like this in the industry," Sgueglia says, referring to the virtual business center. "This will be the next paradigm in merchant retention, reporting and monetization."
With the MerchantCard, merchants can receive automatic email and text alerts when card purchases are made, funds are loaded or transactions occur, and they may transfer funds to and from multiple cards and bank accounts, My Clear Reports says.
The next release will enable businesses to restrict spending on the card so it may be used, for example, just to purchase fuel or food, Sgueglia says.
"Whenever an employee uses the card at the point of sale, they're alerted when that transaction occurs and the dollar amount," he says.
My Clear Reports is developing a mobile application that will enable merchants to manage their card accounts. The company also is working on a mobile card reader that would link with the virtual business center, Sgueglia says, declining to discuss specifics.
"Eventually we would like to see the MerchantCard as a mobile wallet on our MCR mobile application," he says. "We're working on that, too."
Intuit Inc. late last year launched a prepaid card account that merchants using its GoPayment mobile card reader and application could use to deposit their card receivables. MerchantCard extends to all merchant types, plus it has the support of the virtual business center, Sgueglia says.
But not everyone believes that perk will be enough to convince most traditional merchants to embrace a prepaid business card.
If an ISO can sign up 20,000 merchants to use the card and they load considerable value into the accounts, it might work, says Eric Grover, principal at Intrepid Ventures in Minden, Nev. "But I would presume that virtually all merchants have a wallet with a debit and credit product," he says. "Why would he want another one?
There might be a niche market for the card, "but for mainstream merchants, it strikes me that it wouldn't have a lot of appeal," Grover says.