Lauri Geisen has an excellent article on stored value cards in the current issue of Banking Strategies magazine.
There are several ways that banks can make money from stored-value cards. With the consumer cards, there is first the upfront fee, typically a couple of dollars per card above the value retained. Then, with re-loadable cards, there is usually a flat fee charged each time the card is loaded. Additionally, card issuers receive interchange fees when a card is used to make a purchase.
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