A year ago Sen. Robert Menendez, D-N.J., sponsored the Prepaid Card Consumer Protection Act of 2010. On Dec. 17, 2011, Menendez introduced in the U.S. Senate a similar bill designed to foster consumer protections and eliminate "hidden" fees on prepaid cards.
The legislation, called the Prepaid Card Consumer Protection Act of 2011, targets what Menendez called the "most egregious hidden fees" found on prepaid cards. The bill also intends to protect consumers' funds if cards are lost or stolen, or if the deposit holding company goes bankrupt. S. 2030 would require:
Among the disclosure requirements is a provision that prepaid card providers issue wallet-sized summaries of fees associated with programs. S. 2030 prohibits a number of fees from being charged, including annual, overdraft, usage (at the POS), dormancy, balance inquiry and customer service fees.
Additionally, Menendez wants debit card consumer protections extended to prepaid cardholders, namely Regulation E to the 1978 Electronic Fund Transfer Act and Federal Deposit Insurance Corp. protections.
Consumer advocacy group Consumers Union, as well as the New Jersey Public Interest Research Group, came out in favor of the legislation. The 2010 bill failed to gain traction in Congress. A spokesman at the senator's Washington office told SellingPrepaid that the 2011 bill is not materially different than the 2010 version.
The arrival of 2012 brings a new prepaid debit card option for tax refund recipients in several states. Following New York state's early December 2011 announcement of its plan to add prepaid cards as a refund delivery option in 2012, alongside direct deposit and paper checks, South Carolina and now Louisiana have jumped on board.
The South Carolina Department of Revenue will issue an open-loop, Visa Inc.-branded prepaid card through Bank of America Corp. In Louisiana, the MyRefund Card is also Visa-branded and will be issued by JPMorgan Chase & Co.
Unlike the New York State tax refund program, through which taxpayers will be able to check a box on tax forms in order to receive refunds on MasterCard Worldwide-branded prepaid cards, the Louisiana tax refund card will be automatically mailed to taxpayers who do not opt for refunds to be direct deposited to bank accounts.
Byron Henderson, Press Secretary for the Louisiana Department of Revenue, said the program falls in line with the government-wide mandate by Louisiana Gov. Bobby Jindal to more efficiently use state resources. The MyRefund program is expected to save the state government agency $500,000 annually that would have been allocated for the printing and distribution of tax refunds via paper checks, Henderson added.
Forty-seven percent of Louisianians have tax refunds direct deposited, according to Henderson; the other 53 percent receive paper checks. Henderson noted that the Louisiana Department of Children & Family Services and the Louisiana Workforce Commission already utilize prepaid card programs for the distribution of state government benefits.
A partnership between MasterCard Worldwide, watch manufacturer LAKS and U.K. prepaid card issuer Vincento Payment Solutions Ltd. resulted in the launch of Watch2pay, called the U.K.'s first prepaid contactless wristwatch. The watch is integrated with MasterCard's PayPass near field communication (NFC) technology to enable "Tap & Go" POS purchases of up to 15 British pounds per transaction at over 70,000 U.K. retailers, MasterCard said.
MasterCard noted that contactless payment wristwatches are already available in Turkey, Poland and a number of markets in Asia. When customers purchase the LAKS watch online, they also receive a contactless, general-purpose reloadable (GPR) prepaid card. Both the wristwatch and the card have the same international bank account and personal account numbers.
Matt Lanford, Head of Prepaid at MasterCard Europe, said the card brand has nearly 100 million PayPass cards and devices in circulation globally.
According to a November 2010 MasterCard case study, Austria-based LAKS has been developing and producing contactless payment watches since 2002 and has been a MasterCard PayPass-approved vendor since 2006. For the contactless wristwatch implementation in Poland, MasterCard and LAKS teamed with Bank Zachodni WBK, which acted as issuer and processor of wristwatch/card payments.
The case study said LAKS estimated that, by the end of 2011, there will be between 75,000 and 160,000 PayPass-enabled watches in circulation in Poland, the U.K., Italy, Germany, Turkey and the United States.
Digital gift card provider CashStar Inc. said Best Buy Canada and Future Shop became the first major retailers in Canada to offer its e-gift card platform. The e-mail-based digital cards can be personalized with custom messages and shared on Facebook.
Prepaid card distributor epay, a division of Euronet Worldwide Inc., is teaming with Brazilian supermarket chain Grupo Pão de Acúcar to launch what is touted as the first gift card mall program in Brazil. The move is timed to take advantage of the 2014 FIFA World Cup and 2016 Summer Olympic Games in Brazil.
According to a Dec. 18, 2011, Los Angeles Times blog post, Green Dot Corp. will move its headquarters from Monrovia, Calif., to a 141,540 square-foot-space in Pasadena, Calif. Real estate brokers called it the biggest office lease in the area in 2011. Green Dot recently completed the acquisition of Bonneville Bancorp.
Atlanta-based prepaid card distributor InComm launched digital content and gaming cards at eight Best Buy Co. stores in Mexico. The selection of cards will include iTunes, PlayStation, Club Penguin, IMVU and Zynga offerings.
Prepaid card payment processor i2c Inc. said it has signed processing deals with 11 banks since October 2011. Altogether, the 11 banks manage 23 prepaid programs in the United States, according to the processor.
Mumbai, India-based Itz Cash Card Ltd. rolled out what it called the first GPR card in India. The Visa-branded Freedom Prepaid Card is issued by Development Credit Bank Ltd. Murali M. Natrajan, Managing Director and Chief Executive Officer of DCB, said issuance of the card represents an "innovative and powerful step towards empowering the urban unbanked segment" in India.
UniRush LLC launched RushGoals, a new cash-back reward tool tied to the Visa Inc.-branded RushCard. RushGoals is designed to help cardholders create personal financial goals, put money aside in separate sub-accounts and track savings progress.
Geneva, Switzerland-based data security firm WISeKey SA inked a deal with the holding company The Bancorp Inc. to deploy secure financial services internationally via the WISeID platform. Carlos Moreira, founder and CEO of WISeKey, said the agreement is part of WISeKey's commitment to the Clinton Global Initiative to provide "1 billion digital identities with prepaid capabilities by 2015."
International law firm Bryan Cave LLP, which has a specialty in the law as it pertains to the prepaid card industry, merged with Denver-based Holme Roberts & Owen LLP. The combined law firm will have more than 1,100 attorneys in over 30 offices worldwide.
Wirecard AG of Munich, Germany, purchased the prepaid card division of Newcastle Building Society for 8.9 million euros. Newcastle's prepaid card portfolio is considered one of the largest in Europe. The portfolio will be part of Wirecard's newly founded U.K. subsidiary Wirecard Card Solutions Ltd.
U.K.-based prepaid card solutions provider Contis Group hired Andi Lonnen as a financial director. Lonnen, formerly Group Financial Controller at The Private Health Partnership Ltd., is expected to help Contis Group expand its prepaid card footprint across Europe.
Steven J. Kietz brings his expertise in mobile payments technology to merchant-funded rewards program manager edō Interactive as General Manager and Executive Vice President of Strategic Partnerships. Kietz has served in senior executive roles at Citigroup Inc. and JPMorgan Chase & Co.
Digital gifting provider Giftango Corp. appointed Jereme Marshall to the position of Director of Strategic Accounts. Marshall joins Giftango from Western Union, where he was the Senior Director of Global Cards. In his new role, Marshall is expected to drive Giftango's growth through channel partner programs within specific vertical markets.
Plastic Jungle Inc. welcomed Dan Rogers as the online gift card exchange provider's new Chief Financial Officer and Chief Risk Officer. Formerly an executive at BillFloat Inc., Rogers is tasked with overseeing Plastic Jungle's trust and safety practices.
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