It’s easy to unknowingly rack up fees when you’re using prepaid cards, but Visa aims to change all that by rolling out new standards for cards carrying its logo. Consumers will now pay one flat monthly fee, receive easier to understand disclosures, and get a higher level of security with certain issuers.
The new program is voluntary, and issuers have to apply for it. Once approved, prepaid cards will carry a special seal letting consumers know the issuer is on board with the new standards.
New label, new standards
The cards carrying Visa’s new seal must meet specific criteria, which includes charging a flat fee that includes all banking activities. Cardholders will no longer have to pay a la carte for certain types of transactions, including:
- Transaction decline and customer service fees
- Fees for getting cash back at the point of sale
- Balance inquiry fees
- Fees for withdrawing money from in-network ATM’s
- Signature and PIN transaction fees
Overdraft coverage and associated fees are not included in the flat fee.
The new standards also include making the disclosures and fee structures included with prepaid cards easier to decipher so people know what fees they are responsible for and which ones they are not. A guide illustrating how individuals can spend less money on fees will also be included with each card.
Issuers are also responsible for proving consumers with a higher level of security and protection than they have in the past. Visa’s Zero Liability Policy is a part of the package. However, ATM transactions, PIN transactions not processed by Visa, and some commercial card transactions are not covered by the new policy. FDIC/NCUA insurance is also included with the package.
If there is a dispute, cardholders have the same resolution rights as credit card holders. In order to protect users against fraud, the cards include Visa’s Prepaid Clearinghouse Service (PCS). This service was introduced earlier this year.
People who do not have a bank account that allows them to receive direct deposits and pay their bills often use prepaid cards to do this. They can also be used to help consumers track their spending and reduce debt.