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Why companion cards are the MFS industry’s blue ocean

Given that 90% of transactions are currently P2P and cash in cash out (CICO), there remains a whole ocean of untapped MFS to be conquered.

By Maya Barkay
Product Marketing Manager, Mobile Financial Services


Companion cards, plastic or virtual debit and prepaid cards that are tied to a mobile money account, are considered the mobile financial services (MFS) market’s “blue ocean”.  They not only diversify the use cases offered in mobile money, but they also help ensure circulation within the mobile money ecosystem. Given that 90% of transactions are currently P2P and cash in cash out (CICO), there remains a whole ocean of untapped MFS to be conquered.

Companion cards gaining ground
Companion cards allow mobile money providers to expand their offerings with additional MFS such as merchant payments, e-commerce, and ATM withdrawals. This opens up the ecosystem currently characterized by closed loop payments to not only expand use cases, but also reach and onboard new customer groups.

Companion cards bring additional value to both the MFS suite as well as the mobile money ecosystem. According to the GSMA, at least 24 mobile money deployments globally are already offering a companion card.  A valuable addition to mobile money wallets, these companion cards allow MFS providers to increase engagement and brand loyalty among their customers.

Companion card system implementation
On the technology side, companion cards entail adjustment of IT systems and processes such as issuing the Issuer Identification Number (IIN) and authorizing APIs. This requires a PCI-compliant Companion Card Management System (CMS) that allows for creating and managing physical and virtual consumer payment cards, including activation, consumer account association, and card validation during the payment process.

Companion cards also require additional logistics and distribution adjustments. Branding the companion cards entails card embossing and personalization and delivery to the customer. Providers also need to use an alternative delivery service in case external postal services prove to be suboptimal. Keeping the companion card unbranded would entail deciding on whether the companion cards will be distributed through mobile money agents or a third-party distributor.

For business and product positioning, providers should evaluate how offering companion cards can attract new customers and increase engagement among existing customers. Service providers (SP) can opt to provide companion cards to their whole customer base, or only to specific customer groups. They also need to position the companion card in their overall offering and promote its benefits without cannibalizing other MFS offerings such as mobile wallets. To conclude, companion cards enable additional use cases and accelerate mobile money usage. By adding virtual or plastic companion cards, consumers can use their mobile wallet experience for additional MFS such as mobile commerce, ATM withdrawals, and merchant payments.

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For the MFS industry as a whole, this means that the mobile payment ecosystem becomes far more dynamic with the onboarding of new customer groups and new MFS previously not part of the mobile wallet.


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