It’s tough out there for prepaid card legislation. Prepaid cards look and act like credit cards. They also provide many of the same conveniences as checking accounts. At the end of the day, however, prepaid cards are separate from both. That makes crafting legislation that regulates the industry and protects the rights of consumers tricky. Some amount of regulation is necessary. Legislation to regulate an industry is put in place to protect consumers. The best regulations ensure that practices related to securing and protecting consumer data are sound while helping foster healthy competition among businesses. It strengthens the economy.
There’s a dark side to legislation, however. When not kept in check, it can restrict growth and actually limit the rights of consumers. Fortunately, the Network Branded Prepaid Card Association (NBPCA) is focused on ensuring that regulations protect consumers but do not unnecessarily restrict the growth of the prepaid industry.
Take the recent conflict in New Jersey, for example. The New Jersey Dept. of Treasury had proposed legislation that clearly put an undue burden on merchants and consumers and caused several prepaid companies to stop offering services in the state. Thankfully, this legislation was updated before being passed. Consumers and merchants are better represented and the prepaid companies have all agreed to continue selling products in the state. Rebekka Rae, the executive director of The Retail Gift Card Association (RGCA), pointed out in a recent paybefore.com article that it is clear there is still confusion among lawmakers about the prepaid industry and the products it produces that make consumers’ lives better.
The challenges in New Jersey are a perfect example of what can go wrong,. The momentum of the prepaid industry is still picking up speed, but that momentum is in danger of stalling out thanks to potentially complicated and confusing regulations. This should not be allowed to happen, and through the efforts of associations like the NBPCA, it won’t.