The National Prepaid Cards Steering Group
Colin Whitehouse
Independent Govt. Advisor
Chair – National Prepaid Cards Steering Group
colin.whitehouse@sulion.co.uk
National Prepaid Cards Steering Group
 Created in May 2011
 Independent group, supported by MasterCard
 Northern and southern based groups
 50 Local Authorities, 4 Programme Managers &
MasterCard
 Assess sector requirements and capture best practice
 Share best practice, issues and problems for mutual
benefit
 Programme Managers can better shape
their products to true market needs
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 issues
 Advanced Payment Solutions (APS), Allpay, Corporate Pay,
Prepaid Financial Services (PFS)
 Steering Group members provided documentation to
create a supporting online resource
How do prepaid cards help to transform services?
- because they address all four principles of successful service redesign
‘Good practice’ service transformation principles are pretty hard to argue
against
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, as they
know where the
delivery
problems lie
Understanding the
performance of the
process of delivery
by measuring how
well it delivers what
customers want, &
seeing how work
flows between
different people
Identifying the
causes of wasteful
work that is done
e.g. trying to
correct ‘failures’ in
effective service
delivery: the
unnecessary
customer contact
& strain
Prepaid cards are proven to improve the lives of customers, increase staff
morale, reduce costs and eliminate errors
- helping you to spend more of your budget on service delivery and reduce unnecessary costs
What are Prepaid Cards and how do they work?
 Funds are uploaded onto card by Council and/or service user
 Cards can be then used in a similar way to credit/debit card,
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but:
 ATM/cash back use is often blocked
 Spend can be restricted by merchant or by category
Balance cannot fall below zero (not true of all providers)
Direct Debits and Standing Order facilities
Service Users can monitor transactions and balances online
Telephone support can be provided by programme manager
Councils have access to transaction level details
Main business benefits
 Replaces cash handling - safer and more secure
 Good management information (the no.1 benefit)
 Makes more effective use of staff time
 Supports personalisation and commissioning agendas
 Monitored spend leads to better outcomes
 Easy to track client contributions
 Possible income generation opportunities
 No major IT investment required
Main service user benefits
 Prepaid cards are generally available to all, regardless of
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financial circumstance
No need to carry and manage cash
Promotion of life skills / social inclusion
Access to better services and lower online prices
Quicker access to funds
Easy monitoring and management of balances
Funds cannot be ‘lost’ by disappearing into an overdraft
Typical categories of use
 Direct payments
 Disability allowances, young people leaving care
 Budget management and monitoring
 Petty cash replacement, travel expenses, vouchers
 Instant issue
 Cards can be loaded instantly 24/7
 Children’s services, asylum seekers, staff payments
 Councils can carry a stock of cards for emergency use
Typical business uses
 Solving service user based problems
 Unbanked service users - replaces cash
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And unbanked users can pay 8% to cash cheques
 Monitoring appropriate spend of funds
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Easy reporting of transactional use, automatic triggering of reports
Replaces the chasing and processing of paper bank statements
 Taking back funds when necessary
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Funds remain property of the issuing Council
 Better information allows effective service/demand planning
 As an employer
 Payments to temporary or agency staff, assistance/relocation payments
 Travel and other expenses, Elected Member expenses become instantly
transparent
 Replacing petty cash in catering, housing repair etc.
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 prepaid
 Effective use of small teams, reduces need for additional staff
 Risk management based use of information should halve the need
for visits
 Typical usage:
 Cards loaded by BACS transfer as an alternative to a holding
account
 Service users load funds by SO or transfer, by phone or internet
 Cards can be used by nominated carer / assistant / social worker
 Recurring payments can be made by DD/SO
Case study: other examples from the Steering Group
 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 orders
 Replacing handling of cash for:
 Young people leaving care
 Asylum Seekers – Looked After Children
 Emergency payments
 One NW Council estimates savings of 4 FTE’s simply by not
handling cash
Some Frequently Asked Questions - 1
 Ownership of the funds is determined by the Council and
affects the configuration of the scheme
 If a client dies then a predetermined process is designed
to handle repayments
 Money laundering regulations are satisfied by Council
based identity verification
 Cards issue may be prevented by:
 Age
 Inability of client to pass ‘Know Your Client’ checks
 Being on either a sanctions or politically exposed persons
list
Some Frequently Asked Questions - 2
 Usage can be restricted by enabling or blocking Merchant
Category Codes and/or ATM use during setup phase
 Use of active cards can be instantly blocked if necessary
 Prepaid cards can be used a smart cards for a range of services
 costs are currently quite high but expected to fall significantly
 Typical transaction detail:
 Time of transaction
 Merchant description
 Value
 Prepaid card data can be integrated into existing financial
systems in a number of ways (some very simple)
Contents of the guidance document
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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 Studies
In which other service could they be used?
How do I create the outline business case?
How do I arrive at my current costs?
FAQs
Examples from the online resource
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Guide to the use of Prepaid cards for service users
Cardholder agreements
Council / Direct Payments agreement
Prepaid cards business case
Options appraisal report
Project Initiation Document
Tender specification
Marketing brochures
Sample Invitation to Tender
Sample Pre Qualification Questions
…………. and more
Next stages
 Detailed benchmark costings exercise
 Expansion of case study library and online resource
 Expanded membership and scope of Steering Group
 Widening scope to examine opportunities for other public sector
agencies, and using prepaid cards to promote more joined-up
services
 Examination of further uses
 Social Fund
 Universal Credit
 Personal Health Budgets
 Subject to securing funding from February 2013
For further information
 To:
 ask a question after today
 request further copies of the guidance
 suggest regional launch event delegates
 become a member of the National Steering Group
 request a meeting to discuss your potential applications
 obtain contact details for Councils who have successfully
implemented prepaid cards
email: colin.whitehouse@sulion.co.uk
“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?
Question and Answer Session
 Do you have any experiences of Prepaid cards?
 In which service areas do you think you would best be able to
use them:
 to save money?
 to improve services?
 to quickly make a difference?
 In your Council, what are the biggest problems which stop you
from going ahead with this type of initiative?
 What can the Steering Group/Programme Managers do to
help you get started?
 What else would it be helpful to see in the guidance resource?