Visa announced last week a new designation for consumer reloadable prepaid products in the U.S. as part of an effort to simplify fees, enhance consumer protections and improve consumer financial health.
In order to qualify for the designation, which was developed in conjunction with the Center for Financial Services Innovation (CFSI) and The Pew Cheritable Trusts, prepaid programs must meet several requirements, after which they receive a seal on card packaging and materials.
With the new designation come new protections for consumers, including coverage under Visa’s Zero Liability policy, access to Visa’s Prepaid Clearinghouse Services (PCS) for additional fraud protection and simplified fee schedules.
Visa said it established the designation to bring transparency to the prepaid market.
“We created this designation to help people easily choose a Visa prepaid card that gives them more control over their money – anywhere, anytime – without surprises,” Visa President Ryan McInerney said. “Through close partnership with our clients, Visa will help lead the way on promoting these new standards, while continuing to advance the prepaid industry.”
Visa will collaborate with other card networks to introduce a tokenization standard to increase the security of digital payments and enhance the mobile buying experience for consumers.
“Their 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,” Jennifer Tescher, the president and CEO of CFSI, said. “We look forward to continuing to work with Visa to design and test new prepaid features and options that enable consumers to spend, save, borrow and plan effectively.”
According to research released by Pew in February, prepaid disclosure documents vary, making it more difficult for consumers to compare products, and some products do not disclose certain fees—nearly all prepaid cards omitted one type of fee, service or protection in its disclosure materials.