Fearing fraud, some U.S. ecommerce sites will not accept payments from cards issued outside the U.S. For domestic credit control reasons, more than 100 million credit and debit cards issued outside the U.S. can be used for purchases only within their home country. This combination offers an opportunity for Tern, a start-up built in part on assets acquired in 2015 from US Unlocked, a provider since 2008 of virtual cards to online consumers who wanted to buy from U.S. sites. US Unlocked created systems to satisfy KYC (know your customer) and AML (anti-money laundering) regulatory requirements and maintains connections to dozens of card and alternative payment acceptance methods consumers use to fund a U.S.-denominated prepaid card.
Tern added enhanced fraud fighting technology, foreign exchange capabilities, and a mobile app (Android and iOS) for consumers. US Unlocked continues to operate under that name and offers a virtual Mastercard card to foreign citizens who want to buy from online sites in the U.S.
In addition, Tern is going to market with what it calls the Span platform, which provides support for open loop, closed, or semi-open loop consumer and commercial prepaid products. Cards can be virtual or physical. Loyalty, reward, and incentive features are available. Companies including Ingenico, Western Union, Boleto, Sofort, and Jumio connect to Span, which offers a consumer-facing portal for card management, including facilitating funding of accounts by bank transfer, Western Union, Alipay, or
WebMoney. A dashboard provides program
managers with analytics.
Tern is exploring opportunities with mobile network operators (MNOs) and post offices in
developing countries interested in offering virtual cards to their customers. Span’s capabilities are offered to program managers as software-as-a- service (SaaS) and exclusively on a white-label basis.
Tern also brings a growing network of issuers and processors. The local issuer works with the local MNO to promote the virtual card.
Remittances are another focus for Tern. It views cross-border prepaid cards as a solution to the expense tied to money transfers from Western Union, Moneygram, Euronet, and other providers in the U.S. Span can support a money transfer between a U.S.- issued prepaid card and a bank account or collection location in another country. These U.S. cards can also pay bills in a foreign country and execute card-to-card money transfers.