Fiserv Advises Caution to FI's on Pre-Paid Cards Posted by AVCU on 10:06 AM

In a January 3rd American Banker article, card program provider Fiserv reports that far more fraud occurs with re-loadable pre-paid cards than with debit cards. As large banks looked more closely at pre-paid debit cards as a tool to help recoup lost revenues under Dodd-Frank, they find that users view them as disposable. Such cards, according to Fiserv, are more likely to be used in concert with a fraudulent funding source. Banks are still new enough to the prepaid realm that a lot of the payment format's risks remain undiscovered. In addition, the new card serves as another avenue for employee internal theft. The biggest risk, reportedly, is using them to launder stolen funds.

Read the article here.