British Mogul Peter Jones's Data Select Debuts Prepay Card

MobileNews.com reports that Phones International boss Peter Jones (pictured) has waded into the new prepay cashcard market with the launch of the On-X MasterCard, which will be sold to various under-served demographics via his distribution company Data Select.

It expects sales of 40,000 units during the period.

The total UK prepay debit card market, which includes the gifting sector, will be worth £17 billion by 2010, said Data Select. Its principle target demographic is around eight million UK residents with no banking privileges.

Data Select Debuts Prepay Card

How will the CARD Act impact the prepaid industry?

Recently, the prepaid industry has been under heavy scrutiny and with the addition of the Credit Card Accountability, Responsibility and Disclosure Act going into effect on February 22, 2010 even more provisions will apply to gift certificates, store gift cards and general-use prepaid cards. This article from Bankrate.com highlights how expiration and inactivity fees, for example, will be very limited. Customers can not incur inactivity fees on gift cards unless they go unused for a period of over 12 months.

There are however, certain fees that the CARD Act does not protect from like upfront issuance and sales fees. One aspect of fees that the CARD Act is particularly aiming to eliminate is expiration fees. The ACT demands that cards not expire for 5 years after its issuance; many gift cards at this time expire after 1 or 2 years.

What sort of changes do you foresee in the prepaid industry with these new provisions going into effect early next year?

Speakers at the Prepaid Expo USA 2010 will go more in depth into some of the legal and regulatory issues tackling the prepaid industry today. We have devoted an entire day to sifting through the details and helping you understand how the CARD Act will affect your business. Remember, if you’re planning to attend the Prepaid Expo USA event in Vegas this February make sure to mention code XU2348LinkedIn1 for a 10% discount off the prevailing conference rate. Hope to see you there!

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New Jersey Senator looks to regulate prepaid cards

According to NJ.com, the Senate President Richard Codey is calling to regulate prepaid cards to operate with more transparency. While Obama has now imposed certain regulations on credit and gift cards, no new rulings have been made for debit cards.

The Senator looks at the fees associated with prepaid cards attacking the wrong demographic of people, "They turn to these prepaid debit cards as a means to get by," he said. "Instead, they end up sitting around helplessly as they watch their hard-earned money get eaten up by hidden fees."

Read the full article here.

Western Union Introduces Holiday prepaid cards

Western Union is introducing a new prepaid card just in time for the holidays. The gift card includes a greeting card that can be used anytime throught the year. Customers can purchase this gift card by visiting wugift.com. Find out more about the Western Union gift card here.

Spotlight on Prepaid Cards

A recent post from the Charlotte Observer highlights consumers are increasingly turning away from credit cards and bank accounts and moving to prepaid cards for their convenience of use, and that prepaid cards do not require credit checks. In 2008, consumers loaded $8.7 billion in prepaid cards, as opposed to $4 billion from the previous year. There is no doubt that the prepaid industry has grown significantly over the past couple of years.

College students make up a big percentage of prepaid card users. Industry experts only see this increasing even more since a new credit card law that will make it difficult for anyone under 21 to obtain a credit card without an adult co-signer will take effect in February. Congress is even taking a page from prepaid card's book by trying to pass legislation that would force banks to ask permission before overdrawing from their bank accounts.

Prepaid cards have recently come under federal scrutiny and many are arguing for more regulation in the prepaid industry. Do you agree that more regulation on prepaid cards will reduce fees?

Univision’s New Card Offering Empowers Hispanic Community

Recently, Univision announced a strategic alliance with MasterCard Worldwide to introduce two new prepaid financial services, which include the Univision Prepaid MasterCard Card® and the Univision MasterCard Gift Card®. These prepaid cards will be released nationally in 2010 with the goal of providing Hispanic consumers with a safe, cost-effective alternative to using cash. According to studies conducted by the Center For Financial Services Innovation (CFSI), about 35.4 percent of the Hispanic population is unbanked -proving that a large segment of the minority community is heavily relying on cash. The partnership between Univision and MasterCard Worldwide seeks to aid in empowering the Hispanic community by providing easily accessible financial products.

Scott Scovel, General Manager of Financial Services at Univision will be speaking at the Prepaid Expo USA 2010 this February. Take some time to view our speaker line-up below and take advantage of the special priority code we’ve set up for our blog readers for 10% off the conference rate. Hope to see you in Las Vegas this February!

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Consumerist: The Hidden Cost Of PrePaid Debit Cards Revealed

The Consumerist writes today about the hidden cost of prepaid debit cards and the impact that these fees are having on the U.S. economy. Editor Ben Popken writes, with credit cards harder to come by and more annoying to use, the prepaid debit card market is projected to explode from $8.7 billion loaded on the cards to $119 billion in 2012, but a good chunk of that is going to be eaten up by hidden fees and gotchas. Popken gives a brief run-down on some normal costs.

$1.75 for each ATM withdrawal
$1 for each ATM balance inquiry
$.50 for each purchase
$4 monthly maintenance charge

As a prepaid card professional, what do you think of this analysis? We'd like to hear your thoughts.

Craig Fuller of TransCard Recognized as a Top Rising Star of Prepaid

This article in Enhanced Online News reports that CEO of TransCard Craig Fuller has been named as one of the Top Five Rising Stars of Prepaid by Paybefore Magazine. Paybefore's website allowed people to vote from mid-July to August, the five recipients of the award will be profiled in a fall 2009 issue of Paybefore magazine.

Craig Fuller, CEO of TransCard mentioned in response that:

“What is most important to me as a CEO in the prepaid industry is to never stop innovating and pushing the envelope. This is a rapidly expanding field and only companies that invest in the newest, most cutting-edge technology will make it. At TransCard, I am proud to be a part of a team that continually generates groundbreaking ideas and solutions. We will make any organization’s vision a reality.”

Prepaid Card Use Rises

The Salt Lake Tribune reports that Prepaid card usage is up among Americans. Consumers typically buy them from a retailer, load them with money -- sometimes from directly deposited paychecks -- and use them at checkout counters or to pay bills online. And the cards are advertised with a phrase rarely used by financial institutions since the beginning of the credit crisis: no credit check necessary.

In 2008 consumers loaded $8.7 billion, up from about $4 billion the year before, on prepaid cards that carry Visa, MasterCard, American Express and Discover logos and can be used anywhere, according to Mercator Advisory Group, a research firm that focuses on the payments industry.

Consumer advocates warn that the cards can carry an assortment of fees. Nevertheless, prepaid cards have become popular among those who cannot get traditional bank accounts, many of them immigrants who rely heavily on more expensive check-cashing institutions.

For more information, please visit the original article here.

Heartland Payment Systems and Hypercom Expands Payment Processing with Enriched Security

This recent article in reuters highlights Heartland Payment Systems and Hypercom Corporation's newest integration to offer high security payment systems to retailers nationwide and implement Heartland's E3 solution.

Heartland Chairman Bob Carr mentioned that security in payment transaction is very important to merchants, and that is exactly what the E3 solution offers, and with the help of Hypercom the solution will become more widely available to retailers. The software, Heartland Connect Gateway, will enable Hypercom POS systems to integrate the E3 solution, further protecting card data.

Prepaid Expo USA 2010 Agenda Ready for Download, President Bill Clinton to Keynote

IIR is excited to announce two Prepaid Expo USA 2010 keynote speakers.

President Bill Clinton, Founder of the William J. Clinton Foundation & 42nd President of the United States will address the Prepaid Expo USA 2010, taking place February 22-24, 2010, in Las Vegas. President Clinton’s keynote address “Embracing Our Common Humanity” will take place on Monday, February 22nd at 2:30 pm.


Arkadi Kuhlmann, CEO of ING Direct, will also address the audience at the EXPO. His keynote will focus on driving success through innovation. Kuhlmann believes that in trying to re-energize an industry and transform a company, it's about creating a story. As the prepaid industry undergoes regulatory scrutiny, it continues to grow and transform. Through his experience at ING Direct, Kuhlmann will draw key parallels between the transformation of the prepaid industry and his experiences in the banking industry.

For more information on the Prepaid Expo USA 2010 keynotes, agenda, and full speaker line-up, visit the event website.

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We look forward to seeing you in Vegas!

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Holiday Prepaid Cards Can Offer Relief from Money Exchange Fees

Moneyhighstreet.com reports today that research by FairFx.com, who supply foreign exchange currency cards, shows that travellers who buy their foreign currency at airports could pay significantly more than if they had planned ahead and ordered their cash online. Stephen Heath, Chief Executive of FairFX.com, said:“By preparing in advance and buying your currency online instead of using costly debit or credit cards for foreign spending, travellers will be able to get the most bang for their buck this half term.”

We see that these prepaid cards are big within the European market. Will money exchange prepaid cards take off in North America?


Holiday money is 14 percent cheaper when bought online

FiCentive Partners with Redbank to Offer Prepaid Debit Cards

According to this article in bizjournals FiCentive has formed a partnership with a Mexican package and mail delivery company called Redpack to issue a line of prepaid debit cards that consumers can use to send money to friends and family living in Mexico.

FiCentive is taking this chance to gain a percentage of the unbanked market in Mexico. Sonia Bracamontes, sales and marketing director for Redpack mentions:

“This card program is designed to be of great value to the underserved market of the unbanked and underbanked Mexican community in the United States. We believe the Redpack brand is well-known and is trusted within this community and will therefore add significant credibility to the program.”

Prepaid cards under fire for fees

In a recent research report done by the New York Times, they criticize the prepaid banking industry for continually charging their customers with fees on money they've earned. This documentary takes a special look at how hard it is to find out exactly what the fees are when one is considering a prepaid card. How can the prepaid banking industry more effectively communicate with potential customers about the way the prepaid banking card works?

Prepaid cards doubted for number of fees

In an article at the New York Times recently, Andrew Martin looks at the current effects prepaid cards are having on the banking industry. The industry has really expanded over the past decade, and is a way for those who can't bank in the United States, which may be up to 80 million Americans. The article points out that once many customer easily obtain these cards, they are faced with many fees that may have been written in the small print. The fees begin at activation, and continue often through every deposit and withdraw, to every customer service call and monthly feeds from the card.

Congress has yet to examine the rules and regulations with these cards, and many consumer advocate groups are calling out against the numerous fees that often go unnoticed by the consumers until they add up to great amounts of the original deposit. Many companies are beginning to pay their consumers with prepaid cards if they don't have direct deposit, which also brings up some questions as to whether this is fair for consumers. With the introduction of WalMart's MoneyCard, which follows through on low fees for the consumer, fees are falling throughout the industry.

Prepaid cards may be the only choice for some of the users, as they have no real way to open a bank account and receive their income other than to preload it on this card. It can also be used as an option for money management. But now that consumers are calling for protection from the industry, how do you think this will evolve and change the industry? I think WalMart's new card, which does reduce the number of fees, will have an effect on the industry, but it is only a matter of time before Congress looks at the cards and begins to regulate them.

Prepaid cards increase as credit scores rise

Armen Hareyan has an interesting article about how the use of prepaid cards is going up as many of America's credit scores are going up. Prepaid cards offer their users a safe way to use credit cards, can teach teens about managing money responsibly, and don't affect credit scores and reports.

After the current recession is over, do you think prepaid cards will continue their rise in popularity? Now that Americans have had a reality check in credit, when the economy returns to a state that allows for more spending, will we see an increase in Americans who turn to prepaid cards as an increased avenue of spending?

AMEX drops Gift Card Fees

American Express announced today that it will drop monthly fees associated with gift cards--effective immediately. The Washington Post says, the credit card law that President Obama signed in May prohibits gift cards from expiring for the first five years. Fees can't be assessed unless the card has been dormant for at least 12 months. The gift-card provision of the law takes effect in August 2010. Seeking to stay abreast of changes and to keep a good face with its customer's American Express has voluntarily eliminated its fees just shy of one year in advance.

Are other prepaid card or gift card providers to follow?

Western Union Offers New Reloadable Prepaid Visa Cards

This post on Mobile-Financial.com highlights that Western Union now offers two fee-friendly reloadable Visa prepaid cards called the Western Union MoneyWise(TM) and Gold Card Visa prepaid cards. These cards do not carry monthly maintenance fees, purchase transaction fees, or customer service fees.

Tim Sloane, vice president client services and director Prepaid Advisory Service for Mercator Advisory Group mentioned:

"When you take into account activation, maintenance and transaction fees - among other costly additions - the typical reloadable prepaid card user can be charged upwards of $200 in fees over the course of a year. Western Union's new reloadable prepaid programs finally deliver the value proposition consumers have been long waiting for in this market."

More rebates coming in the form of prepaid cards

According to CreditCards.com, 53% more of rebates are being placed on prepaid cards than in 2008. Many customers are not satisfied with this new rebate distribution method, as it doesn't allow them to deposit it, they are encouraged to spend it. For the many reasons companies are turning to prepaid sales cards include increased sales in stores.

While there are many perks for using prepaid cards to distribute rebate money, have you found a backlash from your customers if you've switched the way you give rebates? While giving a prepaid card does encourage a recipient to spend the money, is the reaction the same when a rebate is worth $10 as opposed to $100? Share your reactions with us.

Prepaid cards replace checks as rebate payment of choice

Erica Sandberg of Creditcards.com reports that many businesses -- from office supply stores to wireless companies -- are switching to prepaid cards, and the reasons are multifold. One is the likelihood of boosted sales. According to rebate analyst Hal Stinchfield, CEO of Promotional Marketing Insights, a well-featured rebate card can result in "double-digit or sometimes triple-digit sales growth during the promotion period."

Has your company seen an increased growth in prepaid cards as rebates? We'd like to hear your thoughts.

Prepaid cards replace checks as rebate payment of choice