According to the Washington Post, there are $17m unbanked households. This number is extremely important for the online lending industry. Bank accounts are the vehicle that online lenders use to place and withdraw money from a bank account.
So, how do you work with a customer that only has a prepaid debit card?
You process their transactions through the merchant card network. This alternative costs more than the typically ACH, which usually costs anywhere from $0.25 – $0.40 a transaction. Prepaid cards are superior, in some ways, to the ACH system in a couple of ways:
- The lender gets an instant approval.
- The money is made available, within 48hrs.
- The Lender does not incur return fees when a transaction is dishonored.
- From a collections standpoint, these forms of payment are convenient and instant.
If you’re looking for a partner in the processing space, take a look at Repay Online. They are an OLA (Online Lenders Alliance) and CFSA (Community Financial Services of America) member and recognized as an Inc. 500 fastest-growing private company.
