John Morgan from Perkins Coie writes about stored value cards and some considerations regarding their use.
Stored-value cards (“SVCs”) are prepaid cards that may be used to purchase goods and services. SVCs are rapidly replacing traditional gift certificates due to their versatility and enhanced features such as the ability to reload, incrementally draw down balances, increase point-of-sale integration, and link to loyalty and other incentive programs. However, while SVCs provide convenience to customers, businesses offering SVCs need to be wary of the possible legal implications of using SVCs, including laws that concern banking, money-service businesses, financial privacy, anti-money laundering and unclaimed property.
Meanwhile, The Register comments on e-money in the context of prepaid accounts in Europe and the UK (see: UK FSA Consultation Paper 172 – Electronic Money: Perimeter Guidance).