As credit protection and privacy becomes a greater focus of both the federal government and private consumer rights organizations, many banks have taken a second look at prepaid cards as a source of revenue.
Among the many potential legislative changes on the horizon in 2013 are new protections for consumers against possibly unfair fees and other practices on the part of financial institutions when it comes to prepaid cards.
"There are no government regulations and consumer protections on prepaid cards – debit and credit card rules and regulations do not apply. But that may soon change," according to an article for The Street. "The Consumer Financial Protection Bureau is investigating the fees and practices of prepaid cards and seeking input on ways to enforce safety for consumers."
This is not surprising, considering their popularity. According to a report from the Mercator Advisory Group, consumers put approximately $57 billion on these alternatives to traditional credit cards in 2011. That number was estimated to hit $82 billion in 2012 and jump to $117 billion this year. But, the buck doesn't stop there. Next year the forecast suggests the number will leap yet again to $167 billion.
Not only is that increase consistent over consecutive years, but it is consistently large. If Mercator Advisory Group's prediction proves accurate, it will represent a near tripling of the amount put on prepaid cards over a four-year period.
Versatility is a company's best friend. Payment processor software that can accommodate the widest range of payment methods will allow businesses to serve larger customer pools. The more consumers a merchant can work with, the more consumers there are who want to give their business to that merchant.