Prepaid PIN Distribution via the Internet & the Cellular Retailer

Advantage for Digital PIN Distribution: Shrink and Fraud Reduction
One common problem for retailers is shrink. Shrink is the money lost by damaged or stolen goods. For retailers who stock inventory, shrink, if not correctly managed, can get out of hand fairly quickly. For the cellular retailers who stock plastic prepaid cards, it is difficult to keep track of every possible plastic card at all times. And, plastic prepaid cards are exactly as they sound — thin, credit-card-sized, and easy to steal, especially when a retailer is not keeping a close eye on the inventory levels of these plastic cards. Remember — plastic prepaid cards are practically "money", easily exchanged for their intended service — prepaid minutes. This makes them a prime candidate for theft.

Furthermore, PIN fraud can occur when a dishonest employee simply steals the PIN from the plastic prepaid card and leaves the card in inventory for sale while using the PIN or reselling it to another dealer for personal profit.

By its very design, the digital distribution of PINs practically eliminates shrink single-handedly for prepaid PINs. Without inventory, there is nothing for dishonest employees to steal. Additionally, because the PINs are procured on an "on demand" basis only when the customer pays at the point of sale, PIN fraud is greatly minimized due to the employee's limited exposure to the actual PIN itself.

Advantage for Digital PIN Distribution: More Profitable
Digital PIN distribution via the Internet is, simply put, a less expensive means to distribute PINs. With plastic prepaid cards, physical inventory passes through the hands of different parties. Each party takes their cut to cover their cost of doing business (e.g., their shipping charges, labor, etc.). When it finally reaches the last stop — the cellular retailer — the profit margin is noticeably reduced. Then, on top of that, the cellular retailer must then dip into their already small profit margin to accommodate their shipping charges for the physical inventory.

While it's true that certain POSA machines may not utilize plastic card inventories, cellular retailers are normally charged, at the very least, rental fees and subscription fees for the use and maintenance of the machine itself — all of which can eat into the retailer's already slim profit margin.

With a real-time digital PIN solution, these extra costs simply do not exist. With no physical inventory changing hands, there are no extraneous shipping charges or extra costs to worry about. And, with no additional POSA machines, there are no rental fees involved either. With digital PIN distribution, retailers only pay for the PINs that they purchase at the lowest rates due to the streamlined distribution method.

Advantage for Digital PIN Distribution: Real-Time Reporting and Accountability
A huge advantage of a real-time, digital distribution of PINs is the ability to pull precise and extremely accurate reporting for the PIN sales. With digital distribution, PINs are pulled "on demand" and normally at a much more aggressive market rate. Retailers who still manage prepaid card inventory have tied up funds into their inventories, and reporting to determine a true profit and loss is difficult, to say the least. POSA terminals are marginally better, but tracking accurate profit and loss data and reporting is still difficult, especially when the POSA terminal is separate from a retailer's standard cash till and point-of-sale system.

The clear winner is digital PIN distribution which can provide a retailer with up-to-the-second and extremely accurate profit reporting whenever and wherever the retailer happens to be. The ideal situation is having digital PIN distribution as a part of the retailer's management and point of sale system. This would completely tie the most accurate reporting available to the standard day-to-day operations of a store's register. Such a seamless integration would present the best time-saving opportunity for retailers.