Global payments company Visa has announced a new designation for re-loadable prepaid products in the United States aimed at simplifying fees and improving consumer protections.
Prepaid programs whishing to get the designation must meet a set of standard. The successful cards will receive a seal that will be visible on card packaging and materials.
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Ryan McInerney, Visa’s president, said: "Consumers have been confused by an often complex prepaid landscape. As a prepaid leader, we felt it was important to go beyond current requirements in the marketplace and bring transparency to this growing product area.
"This Visa designation will signify a new level of simplicity, protection and opportunity, enabling cardholders to confidently manage their spending every day."
The designation includes a flat and transparent monthly fee including transaction fees, customer service fees, ATM withdrawal or balance inquiry fees, PIN or signature transaction fees, as well as cash back at POS fees.
Cecilia Frew, head of US prepaid products at Visa, commented: "Whether a consumer wants to use their prepaid card as an account to direct deposit their pay-check and pay bills, or as a companion card to help control spending, this designation will clear the way for consumers to pick the prepaid product that is right for them."
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By GlobalDataVisa developed the new classification with the Centre for Financial Services Innovation (CFSI), the US authority for consumer financial health, and The Pew Charitable Trusts, which provides grants to improve public policy.
Jennifer Tescher, president and CEO of CFSI, said: "Visa’s efforts are vital because millions of Americans are searching for tools to help them reduce financial friction, and prepaid cards can be a valuable option."
In February, Visa announced the Prepaid Clearinghouse Service (PCS), a new industry solution to identify and mitigate prepaid card fraud.
Visa’s PCS is a centralised database that allows financial institutions, processors and prepaid program managers to share prepaid card data such as enrolments, load funding, suspected fraudulent information and previously reported fraud on existing card accounts.
At the time, Brian Triplett, head of North America prepaid products at Visa, announced: "Visa’s Prepaid Clearinghouse Service will deliver a comprehensive compilation of prepaid account-level data from across the industry, which will help reduce prepaid fraud losses for consumers, financial institutions and their clients."
Visa is also working with other card networks to introduce a global tokenization standard to enhance the security of digital payments and simplify the purchasing experience when shopping on a mobile phone, tablet, personal computer or other smart device.
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