The Value in Stored Value

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.