1. Washington DC, September 16, 2009 Harish Natarajan Payment Systems Development Group The World Bank Prepaid Cards- An Overview

2. Financing: WB loans-grants, fee-based and other TA, Regional Initiatives, FSAPs, support to FIRST-funded Initiatives, Others Stocktaking & Policy Advice Implementation Support Vision & Strategy Legal Framework Large-Value Systems Retail Payment Systems Government Payments Remittances Securities Settlement Oversight & Cooperation Help develop sound and efficient payment, remittance and Securities Settlement systems, to: 1. Strengthen Financial Stability 2. Support Access to Finance 2 Payment Systems and Remittances: Services

3. In the retail payment area, the PSDG supports: Creation of comprehensive retail payment system strategies Implementation of an efficient clearing and settlement infrastructure for ALL retail payments Efforts to improve the efficiency of the market for international remittances, through the implementation of the WB-BIS General Principles for International Remittances Services Reforms of the legal and regulatory framework Inclusion of the public sector in the retail space to enhance the efficiency of government payments Creation of an effective payment system oversight function and an inclusive cooperative framework

4. Prepaid Cards - Characteristics “Pay Before” Usually Magnetic Stripe based; Value resides at host No prior banking relationship Usage at ATM, POS and internet Re-loadable Open Loop Vs Proprietary Variants : Chip variant: To address infrastructure constraints Value stored on Card (Chip Card) Authentication using PIN/Biometric Re-Load and Cash-out at “agents” Virtual: Accessed through mobile phone

5. d Prepaid host Production Re-ordering 1 Usage Authorization. & Settlement 5 Issuance/ Load Account set-up & settlement, MIS 3 Distribution Inventory check, MIS 2 Customer Customer Service 4 Prepaid cards- Process

6. Prepaid Cards Mechanism to address varied needs: Customer Funded Corporate Funded Government funded Travel Gift Teen/Youth Student Travel Expenses Fleet Medical/Meals Purchases Rewards Payroll Benefits Transfer Relief distribution Expenses Purchases Payroll

7. Prepaid Cards – A better alternative GovernmentCitizen Reduce cost Easy to administer Reduce wastage and fraud Enforce targeted usage Convenient Cost effective Control “Stigma-Free”

8. Prepaid Cards – Success stories Delivery of US Social security benefits- Direct Express Delivery of Italian social security benefits- Poste Italiane American Red Cross Disaster Relief Russian Pension disbursement – Muscovite Card Employee Benefits- Visa Vale 30 US states deliver child support, unemployment benefits

9. Implementation considerations One Card Vs Multiple cards Open loop / Closed Loop Access Mechanism: Magnetic Stripe / Chip Banking Partner Enrollment procedure Policies Economics

10. Retail Payment Instruments and Systems: Outcomes of the “World Bank Global Payment System Survey 2008” & Cirasino- Garcia “Measuring Payment System Development” “Balancing Cooperation and Competition in Retail Payment Systems”: A World Bank study coordinated by Mario Guadamillas, which includes a framework for a reform agenda and guidelines for proper cooperation and competition Guidance Note for the Implementation of the GPs for International Remittance Services (upcoming) Guidance Note for the proper inclusion of Government Payments in the NPS (upcoming) Retail payment system strategy for the NPS (upcoming) Retail payment systems and instruments: PSDG key resources