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Managing Risk Proactively

Risk is the topic of the day in today’s prepaid and credit card industries. With heavy financial penalties being assessed to banks for not adequately supervising programs and partners, today’s issuers are all aware of the consequences of not maintaining proper risk management.


Avoidance, Denial Or Ignorance – Not A Wise Strategy For Understanding And Controlling Risk

We see it all the time. A provider takes on a prepaid card program without an understanding of the risks involved. Everyone relies on the issuer to know what the risks are and how to deal with them. The program manager believes they have a handle on fraud, but in reality they have only a limited understanding of what could go wrong. With few peers in the industry willing to speak openly on the topic of risk, the program manager moves forward with a false sense of security. Just days after their cards hit the market, millions of dollars in losses have occurred. Suddenly everyone involved is scrambling to figure out why.


Experiencing A Lot of Risk Losses But Don’t Know Why?

The team of payments professionals at E&S Consulting can help. Our team has extensive experience running prepaid programs of all types and sizes. We understand every type of prepaid program risk on the issuing and acquiring sides because we have faced it. Our Risk Assessment services help clients control the risk losses they have and mitigate risk in the future.

Our risk assessment services include helping you set up policies and procedures for assessing risks within third party partners as well as risks inherent in new card programs.


Is Risk Assessment Right For Me?

If you are not sure whether our Risk Assessment service makes sense for your prepaid program, consider the common sources of risk listed below. Have your programs got controls and procedures in place? Are you comfortable that you understand and are actively managing and mitigating the following risks:

  • Issuing risk – risk of taking on a prepaid card program
  • Consumer risk – cardholders may commit fraud
  • Internal systems risk – risk of employee fraud such as running ACHs illegally to load cards or put money in their account
  • Distribution risk – happens at the employer or retail level and could be fraud, lost cards, lost distribution of cards, or shrinkage
  • Chargeback risk – it is very costly to process chargebacks in a prepaid card system so chargeback losses must be managed carefully to minimize loss
  • Acquiring risk – this risk is particularly problematic if prepaid cards are distributed on the Internet