Magazine article American Banker

Pitching Benefit Management for Multiple Accounts

Magazine article American Banker

Pitching Benefit Management for Multiple Accounts

Article excerpt

The Houston payments technology vendor FSV Payment Systems Inc. has developed a card that can be used to access multiple types of medical and government benefits accounts.

The "infinite purse technology" program, which FSV started offering last month, uses a traditional magnetic-stripe card that is linked to several customer accounts; when one account is depleted, payments are automatically shifted to another.

The card is being used to access flexible spending and other types of health-care accounts. Jonathan Palmer, FSV's president and chief executive, said in an interview that it could be used for an almost infinite variety of accounts, including dependent care, transportation accounts, merchant loyalty programs, disaster relief programs, and payroll.

"Its an idea whose time has come," Mr. Palmer said. "It's really unlimited in its flexibility and perhaps in its applications. What we can do with a single card for a consumer is we can help them to manage their lives."

The Brookfield, Wis., banking technology and outsourcing company Fiserv Inc. owns a small stake in FSV, which has been developing the technology for about 18 months and has filed a patent application for it.

The card is not the first one that can access multiple accounts. Ohio uses a smart card for its food stamps and Women, Infants and Children programs.

However, Mr. Palmer said FSV's card is unique, because a payment automatically shifts, or "cascades," from one account to the next if the first account for the transaction is "exhausted."

The technology uses transaction codes to prioritize the accounts. The accounts can also be arranged by merchant category or types of products, so that transactions that qualify only for certain programs will automatically be applied to the appropriate account.

"For example, if a parking garage or rail system transaction comes in, we'd take it from the appropriate purse associated with that transaction," said Brad Hanson, the president of Meta Payment Systems, the prepaid debit card division of the Storm Lake, Iowa, savings bank MetaBank, which is issuing the cards. …

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