[IMGCAP(1)]

Visa Europe is declining to endorse a prepaid card accreditation initiative that a trade association based in the United Kingdom introduced last week (CardLine, 7/11), CardLine sister publication Cards&Payments has learned. The Prepaid International Forum says its accreditation service would certify that prepaid card issuers meet a code of conduct and help the industry avoid bad press from hidden fees, aggressive marketing, poor customer service and allegations of money laundering. The accreditation applies to both closed-loop and network-branded, open-loop prepaid cards. "We felt it important to identify what are the best practices to help ethical, yet profitable, development," Ken Howes, a director with UK-based consulting firm Edgar Dunn & Co. and chairman of the forum's consumer education working group, tells Cards&Payments. The forum represents about 40 issuers, processors and vendors. Visa Europe's refusal to join the accreditation scheme could hurt its credibility because Visa is involved in some of Europe's largest prepaid banking cards, says a source who is a forum member. Visa says it has taken its own steps to protect its prepaid cards. "We have very clear rules under which our members need to operate," Fiona Duncan, Visa Europe vice president of consumer market development, tells Cards&Payments. "We have found [prepaid] programs with our brand in which we didn't approve, and we have shut them down." She declines to say why Visa refuses to join the forum, but sources tell Cards&Payments Visa is sitting out of the year-old association because rival MasterCard Worldwide was instrumental in its founding and a MasterCard executive chairs the group's board. Howes declines to comment on the reasons. However, he says some of Visa's member banks that issue prepaid cards would like the brand to join. "Visa would have a lot to contribute to the forum but also a lot to gain from being a member," Howes says.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry