Faster Payments for Business: How the Stream Prepaid Card Expedites Disbursements

Heeding a call among businesses for faster and cheaper payments, payments provider Payment Data Systems Inc. has released the Stream general-purpose reloadable (GPR) prepaid card to make it easier for companies to send funds, like commissions or rewards, to contractors or customers.

The card, which bears a MasterCard Inc. brand, uses a closed network backed by San Antonio-based Payment Data Systems to instantly move funds from the business’s account on the network to individuals.

As Houston Frost, Payment Data Systems senior vice president of corporate development, explains, the service works like this. A business has a cadre of salespeople or temporary workers it needs to pay. The business sends via a wire transfer the total amount to be paid to Payment Data Systems. Then, as directed by the business, Payment Data Systems distributes the funds to the individuals, charging a nominal fee of a few cents, or less if volume warrants, per transaction. Disbursement can happen as soon as the funds are received by Payment Data Systems.

Frost says Stream is quicker and cheaper than traditional automated clearing house funding for general purpose reloadable cards like Stream. “The idea would be the business would prefund a day in advance or a full week’s worth of disbursements,” Frost tells Digital Transactions News. This might enable service companies, such as a private car-sharing business, to pay their drivers daily rather than weekly because the costs are less with Stream, he says.

Stream is different from other GPR cards in that Payment Data Systems is able to control the network, which helps lower the cost and affords greater control. “What’s powering this instant system on Stream is, once you prefund the account with Payment Data Systems, it’s basically a closed network until the consumer swipes their MasterCard and pulls money off the network,” Frost says.

Stream’s emphasis on speedier payments for businesses could differentiate it from similar services, says Ben Jackson, director of the Prepaid Advisory Service at Mercator Advisor Group Inc., a Maynard, Mass.-based payments consultancy. “Speed to spend could be important for some users,” Jackson tells Digital Transactions News via email.

Consumers, too, can obtain a Stream card independently of a business’s participation. It has no monthly or domestic purchase fees, but does carry a charge for international transactions, ATM balance inquiries, and paper statements. Consumers can load other funds on the cards, too.

Businesses using Stream can distribute the cards, which also are available in a co-branded or white-labeled format. New York-based Metropolitan Commercial Bank is the Stream card issuer. Payment Data Systems expects add a chip to the card within 90 days, Frost says.