OK , so the Nectar Prepaid Card does not really exist at this point and its not the way it’s meant to be as from all accounts, its the chaps at Red Bull who are in the business of giving people wings but then again, prepaid cards would really fly if the kind folk at Nectar would listen and launch the Nectar Prepaid Credit Card.
I came across the idea of the Nectar Prepaid Card whilst musing over the constant proclamation by my 2 and a 1/2 year old nephew about “good ideas” and started thinking about the ultimate good idea within the prepaid industry.
Whilst the idea of improving produce attractiveness through the addition of ancillary services like ID theft protection, cash back and travel insurance as well as improving the security of funds on prepaid credit cards through the adoption into the financial compensation scheme all qualified as good ideas, it was the idea of the Nectar Prepaid Card which would undoubtedly qualify as the ultimate good idea and give the prepaid industry a real shot in the arm.
It’s a product that is just waiting to happen and makes 100% perfect sense!
The Mechanics of the Nectar Prepaid Card
Well, we only need to look at everything that is good about the existing Nectar Loyalty Card to see why
- The Nectar Loyalty card is FREE to get and use
- The Nectar Loyalty card gives you points for loyalty usage in different retail locations
- The Nectar Loyalty card costs the consumers absolutely nothing to use – Zilch
- The Nectar Loyalty card programme is funded via the MI (marketing information) generated which is paid for by the loyalty partners
Not take all of this and pour it into a prepaid credit card proposition, stir carefully and thoroughly and you should end up with an absolutely delicious prepaid credit card.
For that to be the case, we would need our new Nectar Prepaid Credit Card to be absolutely FREE and cost nothing to the consumers – So lets see how we could make that work.
- Free Card: Well, firstly the Nectar prepaid card would need to be free. That is easily achievable under the same rules as the existing loyalty card – so no additional hoo-haaing to be done there.
- Free to Use at Retail and ATM’s: So we do also need the Nectar Prepaid card to be absolutely free to use for the consumer. Now this is a challenge as there will be processing charges at ATM and retail locations for usage which currently do not exist with the loyalty card and the scheme partners may not wish to fund the additional expense. So why not introduce a system whereby consumers can pay for POS and ATM usage by using their Nectar points!
Paying for ATM and Point of Sale with Nectar Points
So lets say, I get a brand new Nectar prepaid card. It comes with 50 points to start with. I use my card at Amazon, HMV, BP and Sainsburys thereby collecting 50, 20, 50 and 30 points respectively for a grand total of 150 points in addition to the 50 points I already have. So now with our new system of points paying for point of sale (POS) and ATM transactions, every time I use my card at POS, I maybe spend 5 points and every time I use my card at an ATM machine, I spend 20 of my collected points.
So my purchases now not only mean that I can earn points but also that I can use my earned points to pay the small transaction fee for point of sale and ATM transactions which means my card stays free to use. In the off chance that the cardholder does not have enough points to cover an ATM/POS transaction, perhaps a 10p charge could be implemented. I do not think you would have consumers complaining about fees in this case. I certainly would not.
Furthermore, with the original loyalty card, there are no funds on the card which means the the Nectar guys were earning no interest on those funds and breakage earned was also in terms of points. Now on the other hand, their is breakage and interest to be had so which means additional funds for the retail partners to share and ensure that the card stays absolutely free for the consumer in every single way.
So what do we have here now
- Card FREE – Check
- Usage at Merchant retail locations FREE – Check
- Usage at ATM FREE – Check
- Zero cost to the consumer as subsidised by the MI generated and paid for by retail partners – Check
- Potentially no additional cost to Nectar and its Loyalty Partners who benefit from MI and greater reach – Check
So we would have a solution which would have all the benefits of the original Nectar Loyalty card, and along with the Loyalty card and the Nectar credit card, even extending the reach of Nectar to all those who do not qualify for a credit card (4.5 million failed credit card applications last year) providing even more valuable MI to Nectar’s partners across the whole market to include credit, prepaid and loyalty!
Nectar aka Loyalty Management UK Limited – are you listening?
Nectar Prepaid Card, anyone?
Check out our listing of the best prepaid credit cards as well as free prepaid cards in the UK.