Electronic PINs Take Over Cards!
Prepaid Wireless PINs
infer a number of well known terms, all meaning essentially
the same thing:
comes down to it, PINs (or Personal Identification Numbers)
have the identical function to Prepaid
In fact, a topup card is nothing without its PIN!
So if a card needs a PIN to be a useful, then really, what is
the difference you might ask? This might sound like a strange
expression, but I like to describe a card as a physical manifestation
of a PIN. I don't know if this helps visualize, but what it
means is that PINs are in fact the real
sometimes they are printed on physical plastic or cardboard cards (the
physical manifestation part), while other times they are distributed
electronically and printed on paper receipts at the store.
What does electronic distribution really mean? This method
actually evolved after prepaid wireless cards, and basically means that
PINs are never printed on physical media that hangs on a display peg at
the store. Rather, stores use their terminals (similar to the
terminals you swipe your credit or debit card in at the grocery store
for example) to request a PIN sale. The PIN is then pulled
immediately from a back end, secure database and delivered to the
terminal. The clerk can then give you a paper receipt with
the PIN printed on it. It seems so simple, and yet there is
actually a lot of technology behind this process, but that's a topic
for another page!
typically include the following general characteristics:
- Display the amount (often referred to as "denomination"),
which is the value of the PIN (this can be different from the amount
you actually paid for it - more on this later!)
- Instructions on how to redeem your PIN (i.e. how
to add the money to your prepaid wireless account)
- Legal terms and conditions
- The store name and address
- A transaction ID or control number that identifies the
- A phone number to call should you have a problem
Unlike physical cards, there's no scratch off section
covering the PIN. It's simply printed in plain view on the
receipt, so you definitely don't want to let anyone else see your PIN
without your knowing!
have the following
significant advantages over physical cards:
- There is no physical inventory, which means that there is
no product production, shipping, or warehousing. You
can only imagine the cost savings here.
- Because there is no physical inventory, you essentially do
away with the risk of running out of cards to sell, or having to worry
about forecasting the right amount of each denomination (ex. $20, $30,
$50). Having managed card forecasting, ordering, printing,
and distribution in the past, it always amazes me the time, effort, and
cost of this process.
- Inventory doesn't get old or stale. With cards,
the company's brand or colors can change, instructions on the back can
change, terms and conditions can change, etc. There is a
tremendous cost to destroy outdated inventory, and because of the fear
of running out of inventory, most carriers have three to six months of
inventory on hand at any given time. So, if you don't want to
spend the money to destroy the inventory, it could take a long long
time to sell through the old stock. With PINs you don't have
this problem! Inventory is managed electronically, and
information printed on the receipts can be changed within a matter of
days or weeks.
- Problems can be fixed much more easily. Consider
wrong PINs are printed on cards, or if the PINs are compromised in some
manner (ex. stolen!). Destroying physical inventory, as
discussed above, is a huge cost and headache. On the other
hand, destroying an electronic database is quick and easy.
- New products can be easily introduced with minimal effort
and risk. For example, let's say that you want to test
whether a $10 denomination would be popular, but are concerned that it
might negatively affect your revenue (because the lowest denomination
was previously $20). If you take the physical card route, it
will not only take you months to get into the marketplace, but if it's
successful, it will take you months (and lots of money!) to get it out.
On the other hand, creating $10 electronic PINs is cheap and
fast, and can be removed from the system very easily if unsuccessful.
are also some
disadvantages to electronic products:
- They're not pretty! Consider a nice,
vibrant, colorful, company branded card on the shelf that you can buy
and take home with you. That's certainly much more compelling
than taking home a PIN printed on an ugly black and white paper
receipt. We've learned from Apple's products that customers
will often prefer to buy things that are prettier even if they lack
- Electronic databases can be much more easily compromised
(i.e. fraud!). Stealing a file is much easier than walking
off with a carton or massive pallet of cards from a warehouse.
- Receipts are much easier to lose or get ripped/damaged
before you get a chance to redeem the PIN onto your
Generally, carriers and a good proportion of retailers and
distributors, much prefer electronic PINs over cards. Over
the past years you will have seen a significant decrease in the
distribution of cards, and a big push to electronic products.
However, big retailers (ex. Walmart, Target, Best Buy) still
do better with physical inventory hanging on the shelf, and
operationally at the checkout lane, activating a card is less of a
hassle than printing a PIN. Ultimately, however, I expect all
products to be virtual even if there is marketing collateral hanging on
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