Breaking News Bar
posted: 6/8/2014 6:22 AM

Visa to label prepaid cards that have lower fees

hello
Success - Article sent! close
  • Visa said it will put labels on packages of cards that meet a new set of standards it unveiled Tuesday.

      Visa said it will put labels on packages of cards that meet a new set of standards it unveiled Tuesday.
    Associated Press

 
Associated Press

NEW YORK -- Visa wants to make it easier for people to spot a cheaper prepaid card.

The payment processor said it will put labels on packages of cards that meet a new set of standards it unveiled this week.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

Those standards include a flat monthly fee and no hidden charges. Companies that issue Visa prepaid cards will have to apply for the new label, and the program is voluntary. It could take up to a year before the seal of approval starts showing up on packaging.

Prepaid cards are mainly aimed at people without checking accounts. The cards allow people to pay bills, receive direct deposits and swipe it like a debit card in stores.

But critics have said some cards aren't clear about what they charge, even attracting attention from the Consumer Financial Protection Bureau. The federal agency is currently testing fee disclosures that it may propose on prepaid card packaging.

Visa hopes its new label will push card issuers to be more transparent and lower fees. To receive the label, the card must have no fees for declined transactions, calling customer service, paying at a cash register, using in-network ATMs or for getting cash back at a register. The cards also must be insured by the Federal Deposit Insurance Corp. or the National Credit Union Administration. They will also have Visa's fraud protection.

The new standards were developed with the Center for Financial Services Innovation and The Pew Charitable Trusts.

Visa hasn't come up with a new name for the label yet, said Cecilia Frew, who oversees its prepaid card business. Since card issuers need to apply to receive the label, it could be nine to 12 months before Visa starts awarding them.

The new label is only for U.S. cards. Visa has 25,000 prepaid card partners around the world.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here