Pre-paid debit cards & stored value cards: What's the difference? - John Burnett

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Pre-paid debit cards --- stored value cards?
by John Burnett, BOL Guru
BIO AND CONTACT INFO

Question: What is the difference between "pre-paid debit cards" and "stored value cards"? Are there any regulatory issues with offering them (other than EFT Error resolution?) and are there any difference in offering one over the other?

Answer: I believe that pre-paid debit cards are a form of stored value card. I also believe that this product fits the definitions of "account" and "financial institution" in Regulation E sufficiently to bring transactions made with such a product under all of Regulation E, including the statement requirements.

Note that a "financial institution" includes any person holding an account subject to EFT transfer (not just a bank or credit union). And "account" includes "any consumer asset account," not just traditional deposit accounts.

First published on BankersOnline.com 8/4/03

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