Credit limits and MCC blocks
Establish guidelines and procedures for increasing single purchase and monthly spending limits for primary users and procurement staff in emergency situations. Also set up guidelines for removing merchant category code (MCC) blocks during disasters. Work with your customer service representative to make sure that credit limits can be raised and MCC blocks can be removed in real time.
Consider setting up emergency cards with $ I credit limits that can be raised as needed during a disaster Remember that in an emergency, it may not be possible to get new cards issued quickly.
Designate a backup recovery site equipped with PCs and the necessary connectivity so you can run your card program management and other systems if your primary site is damaged and inoperable. At minimum, be sure that complete records of your cardholder information are stored at a secure secondary location.
Bid solicitation requirements
Establish rules for suspending your normal competitive bid solicitation requirements for purchases of critical emergency goods and services.
Early payment discounts
Set up guidelines for negotiating early payment discounts for large-dollar purchases from vendors and contractors in return for payment by card. If discounted payments will eliminate standing purchase orders, determine how the freed-up funds can be invested.
Emergency purchase transaction reporting
Establish procedures for using your card reporting system to collect transaction information on emergency purchases to monitor spending during disaster recovery and to facilitate post-emergency audits and analysis. Continue to maintain requirements for turning in paper receipts for card purchases.
Grant applications and insurance claims
Determine how to use your card reporting system to generate the data required for the preparation of federal and state disaster recovery grant applications and insurance claims.
The Emerging Impact of Prepaid Cards
Just as purchasing cards have become the gold standard for government first-responder disaster relief needs, prepaid cards have begun to emerge as a way for consumers to handle their personal finances during the chaos following a disaster.
With so many homes destroyed in the wake of Hurricane Katrina, many victims could not receive unemployment checks, not only because they no longer had an address, but also because the mail service was erratic. During this time, prepaid cards became a more efficient way to transfer funds.The cards could be loaded electronically, bypassing the logistical challenge of distributing benefits through the mail.
Hurricane Katrina caused several companies to re-evaluate their traditional compensation program after the sudden relocation of employees meant paper paychecks had to be reissued and new addresses tracked down. A Federal Reserve study on the nation's response to Hurricane Katrina found that evacuees could not easily cash checks they already had or pick up paychecks held by their employers.1 According to a 2006 consumer study by the American Payroll Association, more than a quarter (26 percent) of respondents said they were not confident that they would continue to be paid in the wake of a natural disaster.2
Electronic payroll programs can help businesses improve operating efficiencies that can better prepare them for a natural disaster Prepaid cards also make it much easier for the cardholder In a post-disaster landscape, where banks and cash machines are non-functioning or destroyed, prepaid cards associated with a major payment brand remain readily accepted currency. Also, prepaid cards are often covered by a zero liability policy, which prevents against unauthorized purchases on lost or stolen cards, making them safer and more secure than using cash or checks.