According to a recent NY Times article, Visa is responding to consumer concerns that prepaid cards are often trickier to use — or to give — than they should be, since fees and terms often differ, leaving users confused, or simply with less of a balance than they imagined they had.
Now, the article states, “Viisa plans to offer a special designation — it hasn’t decided yet what to call it — for its cards that meet (new) standards, said Cecilia Frew, head of United States prepaid products for Visa. The cards’ packaging will carry an emblem so consumers can quickly tell if the card meets the criteria.”
The article notes that Visa is creating this new designation after consulting with nonprofit consumer groups like the Center for Financial Services Innovation. “To qualify” for that designation, the article continues, “cards must cover all basic activities, like purchases and in-network A.T.M. withdrawals, with a flat monthly fee, although that fee will vary by card.”
Additional qualifiers are that “the cards must also forgo overdraft coverage and fees; provide a simple, easy-to-find disclosure of terms and fees; and carry federal deposit insurance.”
When speculating on whether Federal regulations might eventually be brought to prepaid cards, the article says that the Consumer Financial Protection Bureau “has been studying prepaid cards and is expected to propose new rules for them soon; Visa’s plans could be affected by the agency’s proposals. The agency, for instance, has been testing simple disclosure boxes, to help consumers see what fees prepaid cards charge.”
The idea is to make prepaid debit cards more transparent, better enabling more widespread usage. It’s worth noting that even while some prepaid debit is used by customers who don’t always have access to “regular” bank accounts or cards, an increasingly wide range of consumer like the cards both as “budgeting” items, and because they are safer in case of a hack, or security lapse, since they can’t lead back to “regular” account information.
(In this week’s hacking news, by the way — and distressing that this has become a weekly occurrence — some malware has been detected in mobile banking apps, which has the potential to compromise a wide range of banking data. We’ll be following up on this in subsequent posts.)
This means that even customers you might not expect to use prepaid debit cards might want to have that option. If you’re not offering prepaid or gift card options yet to your regular shoppers and clients, contact AVPS to find out about the programs we offer.
As ever, your customers want to keep their options open. Make sure you can offer those options to them, and let AVPS help.