Linking prepaid processing in particular to the Visa-Monitise service could be a canny move, coming just weeks before the expected effective date for a new law that will impose strict new limits on debit card interchange fees. The law, known as the Durbin Amendment to the Dodd-Frank Act passed last year, exempts reloadable prepaid cards, allowing issuers to continue earning current rates and putting pressure on issuers to make prepaid offerings more attractive with services such as mobile access. “The Durbin Amendment could well fuel prepaid cards, and so [issuers] need to offer a full suite of services for prepaid,” says Todd Ablowitz, president of Double Diamond Group, a payments consultancy in Centennial, Colo.
A bill in the U.S. Senate to delay the amendment’s effective date, currently set for next month, failed on Wednesday when it fell short of the required 60 votes.
At the same time, while Durbin may expand the market for prepaid products, cardholders are increasingly expecting prepaid cards to feature mobile services. “You’ve got to have services like this to attract prepaid accounts,” says Ablowitz. “It’s table stakes.”
Digital Transactions, June 9, 2011
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