Prepaid transaction cards or prepaid stored value cards, i.e. transaction cards that require funds to be deposited into an account for use of the card and which can then be used for purchases or ATM withdrawals up to the prepaid amounts, are becoming more and more popular. Certain prepaid cards are reloadable, i.e., the customer can add funds to the associated account. An example of a reloadable card is the Travelers Cheque Card from American Express®. Other cards cannot be reloaded. Examples of such non-reloadable cards are the American Express® Gift Card and the Be My Guest® Dining Card from American Express®. Due to increased fraud, risk and security concerns, issuers of prepaid transaction cards obtain certain demographic data about the card customer before activating the card.
The current process for issuing such cards generally includes an application process and an activation call. In the application process, issuers obtain the desired demographic data by requiring a customer to complete an application similar to a credit card application. The application can be completed as a paper application or on-line, and must be sent to the card issuer for review and approval.
If approved, a card is then issued to the purchaser, or to another recipient for whom the purchaser acquired the card. When the recipient receives the card, the recipient must activate the card. Typically, this is done by having the recipient call a toll-free activation number that is provided by the issuer which prompts the recipient to enter information to confirm that the actual recipient is the intended recipient. The traditional application and approval process is time consuming and it usually takes several days, i.e. 7-10 days, for a recipient to receive an activated card.
Thus, there is a need for a more efficient verification system to activate prepaid transaction cards and capture customer demographic information, which substantially eliminates fraud and security issues.