Emerchants wins BPay approval

Pre-paid card supplier Emerchants Ltd took a big step in the transformation of its business last week when it was approved as a payer institution member of the BPay scheme.

The approval means that users of Emerchants' cards will be able to pay bills using BPay.

Emerchants is moving away from its reliance on the pre-paid gift card market, which accounts for most of the 516,000 active cards it has on issue, and is aiming to be a supplier of re-loadable cards to companies, government departments and not-for-profit organisations.

Having BPay approval is an important milestone in achieving this goal.

In July, the company received a letter of intent from the Queensland Department of Communities, Child Safety and Disability Services that confirmed acceptance of an Emerchants' program specification for a debit card product. The department plans to use debit cards to distribute emergency assistance to victims of disasters.

Emerchants is also running a pilot program with the Salvation Army to supply debit cards to welfare recipients.

Emerchants' chief executive, Tom Cregan, said the company's pre-paid cards were different from those supplied by groups such as Travelex because they were backed by an administration system that allowed the issuer to control the use of the card.

Cregan said: "A company can issue our card to staff for petty cash items or travel expenses. Our system allows the company to set transaction limits, specify the merchants where the card can be used and the days on which it can be used."

It also has a reconciliation system that allows the issuer to manage its exposure to fringe benefits tax and GST.

Cregan said the company had some corporate clients in the mining industry.

Emerchants' partners include the card schemes eftpos and Visa, and three authorised deposit-taking institutions - Heritage Bank, Bankwest and Cuscal.

The big growth in the pre-paid card market in Australia has come from banks and card schemes selling travel cards to consumers. Cregan said Emerchants could not compete in this market because it did not have a distribution footprint.

He said the corporate, government and not-for-profit market was growing very strongly in the United Sates. "We are on a similar trajectory here," he said.

At an investor presentation in August, the company said the total number of active cards increased by 30 per cent in 2012/12, and transactions increased by 48 per cent.