Bank of Baroda eyes prepaid card base of 1 million in 5 years, seeks external assistance

Mint.The lender, which had 454,608 prepaid cards as of November, plans to add 100,000 prepaid cards—both domestic and foreign—every year, said the document inviting external agencies to submit their bids.The state-run lender also had an active card rate of 25%, or 112,801 cards, higher than the banking industry average of 18%, as of November, according to data from the Reserve Bank of India (RBI). An active card is defined as one that has been used for at least one financial transaction in the past year.The bank also has 1.1 million, including 994,062 active, wallets.“The purpose of the RFP (request for proposal) is to seek a detailed technical and commercial proposal for (an) end-to-end prepaid card management module…” the bank said in the document.The project includes issuing rupee prepaid cards, foreign currency prepaid cards (single or multi-currency with a minimum of 12 currency wallets), and national common mobility cards.

It would also include the processing of rewards and cashback.The agreement with the service provider will also include incentives and penalties. For instance, the bank will offer a 20% incentive—over and above the base compensation—if the service provider exceeds the annual target, provided customers make their first transaction within 60 days of card issuance and spend at least ₹50,000.Conversely, if the service provider fails to meet the annual distribution target, the bank will impose a penalty equal to 25% of the compensation on a quarterly basis.“Claw back will also be triggered in the case of applications found fraudulent, and cards were cancelled within 180 days with/without a single transaction,” it said.Mint's emailed queries to Bank of Baroda remained unanswered.Among banks, NSDL