In 2016 the GSMA released a report outlining the success of companion cards and mobile money accounts.
“Mobile money service providers who have embraced companion cards cite the ability to fast track the uptake of a range of use cases, and report an increase in customer acquisition in cases where cards are aspirational to target customer segments.”
Companion cards fall under one of two categories:
- Open-loop cards, which enable purchases anywhere bank cards are usually accepted,
- Or closed-loop cards, which limit customers to making purchases at certain locations where the card is accepted, such as a specified super market chain.
These options offer the capability to cash-in, cash-out, make merchant and online payments, person 2 person transfers, and in some cases make bill payments too. As of 2016, at least 24 mobile money deployments globally offered a companion card.
Service providers in the Philippines launched companion cards in response to the demand from an emerging new customer segment. Young, tech-savvy consumers who own smartphones but had not yet created a financial footprint were not creditworthy in the eyes of traditional banks, but required a suitable payment service.
As part of the mobile money account, Smart Money and GCash, offered both an open-loop self-branded companion card and an open-loop card to accompany international schemes. Since then, they increased their product offering to include in-app virtual cards as well as personalised physical cards. The Philippines is one of the few markets where these products are available.