Blog: 5 Ways to Make Prepaid Card Onboarding Less Painful for Consumers

By Michael Boukadakis, Enacomm

June 17, 2015: In the U.S., identity verification by financial institutions is necessary—but it doesn’t have to be a necessary evil. Technology has advanced, and mobile phones can enable customer authentication in real time, saving banks, credit unions and prepaid card providers money, while improving the customer experience from the start. The USA Patriot Act requires a customer identification program (CIP), but when you combine mobile technology with “out of wallet” authentication—also known as knowledge-based authentication (KBA)—the onboarding process of authenticating new cardholders is simple and secure. Not every prospective cardholder will have a smartphone with a data plan to participate in this process, but the number of prospective cardholders you can reach this way is increasing every day.

Picture this: Jane plucks a prepaid card off the store rack and takes the card to checkout. She pays the card fee (if there is one) and an initial load. After the transaction is complete, Jane can call a number to activate the card and initial load. At that point, she also could go through CIP, which requires authentication of her identity. This process could entail uploading an image of her driver license from her phone and taking a selfie in order for the system to compare the two photos and verify that Jane is the person pictured on the ID. Before the full features of the card are activated, Jane might also be asked to answer personal, historical questions, for which only she should know the answers—e.g., What year was your Toyota Camry? What was your address on Sunberry Court? Which of these people are you associated with?—a process that takes just a couple minutes. Once Jane is authenticated, she can realize the full benefits of her card, which is now reloadable, has higher balance limits and can be used at ATMs and online. Although the specifics of your authentication process may differ, there are five keys to keep in mind to make the process less painful for consumers:

1. Lose the in-store lag time
Customers want to be able to load and use prepaid cards immediately when they buy them in-store. The need to verify personal information and authenticate consumers’ identities before a reloadable personalized card—with higher load limits—can be mailed, causes days or even weeks of delays, resulting in loss of customer interest and failed activations. Mailing cards is also expensive. A large portion of an organization’s investment is wasted due to activation lag or abandonment. With a rapid onboarding solution, cardholders can be authenticated with accounts activated and ready to reload cash in minutes.

2. Mobilize account activation
Next-generation KBA enables organizations to authenticate customers via their mobile phones and activate their accounts in real time. A customer can use his or her mobile device to activate immediately and load additional cash on the card without leaving the store. Plus, a prepaid card company, for example, can authenticate the customer on-the-spot, without using the IVR or the costly interaction of a customer service representative speaking live with the consumer. Engaging customers in their “mobile moment” with an activation and authentication service is more comfortable and convenient for many customers.

3. Use a customer-friendly interface
Research and anecdotal evidence suggest many customers avoid calling an IVR or interacting with an agent for activation and authentication and would prefer to be helped through the process by a pleasant avatar. Alternatively, they can authenticate by landline or the Web. Using a customer-friendly interface, next-generation KBA guides cardholders through authentication using leading-edge techniques that draw on credit and non-credit databases. With the significant rise in wireless usage, mobile KBA meets the wants and needs of consumers.

4. Make the process quick and easy
The fast pace of society and business calls for quick, reliable mobile authentication. Using a layered, dynamic approach versus older static methods, new KBA technology integrates fraud detection, validation and authentication into a single process. Customers can simply tap a link, then click a few buttons and authentication will be complete.

5. Avoid intrusive requests
Financial institutions are required to positively identify and authenticate their customers—but the process shouldn’t be akin to the Spanish Inquisition. A brief explanation prior to conducting KBA—both the explanation and KBA can be automated—will put the cardholder’s mind at ease. Instead of human agents making customers feel like they’re in the hot seat with challenge questions, automated KBA asks for limited personal information and then presents questions that can easily be answered by the true user. Information, such as a Social Security number or ZIP code, can be entered using many types of mobile devices. A variety of questions, which are dynamic in nature, change with each customer’s access. Today’s KBA technology asks customers a series of multiple choice questions, and if the customers do not answer all of the questions correctly, additional questions will be posed or a call can be placed for further verification.

Multilayered authentication is a must for financial institutions, but customer relationships need not be damaged in the process. The latest identity verification solutions that leverage the mobile channel can be consumer-friendly, enhancing the customer experience while reducing call center time and saving money. For prepaid card companies, new mobile KBA can transform a necessary evil into customer goodwill.

Michael Boukadakis is the founder and CEO of Enacomm, a provider of intelligent customer interactions technology. He can be reached at

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