PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

U.S. Democrats Target Prepaid Debit Card Fees…and More

By Tim Sloane
December 23, 2010
in Mercator Insights
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

An article publishedby Reuters describes the Democratsmisguided effort to cap fees on prepaid products ignoring theoverwhelming evidence that consumer costs increase as legislatorseliminate transactional fees (as seen with Durbin Amendment and RegE changes).

“On Friday, a group of Senate Democrats introducedlegislation that would limit the types of fees that could becharged on prepaid cards.”

Incredibly, the example used to indicate the need for thisregulation, the Kardashian Kard, follows the very model theselegislators will force on all prepaid products. The Kardashian Kardrequired a large upfront annual fee ($90.00), but then chargedno transactional fees for the year.

These legislators are now forcing a version of theKardashian pricing model on all prepaid card products when theystate “We need to ensure that families who rely on prepaid cardsare not surprised by hidden fees and are not hit with fees that aretotally unnecessary,” Democratic Sen. Robert Menendez of NewJersey, who introduced the bill, said in a pressrelease.

So what Senator Menendez’s bill recommends is that allprepaid cards follow the Kardashian Kard model: Eliminatetransactional fees and replace them with a higher single-ratecost.

Of course this legislation eliminates a cardholdersability to control costs. Rather than a cardholder being able toavoid high cost transactions to keep costs low, this legislationwill force issuers to charge higher upfront fees to cover thesetransactional costs for all cardholders – even those that don’t usethem.

This legislation is guaranteed to increase the upfrontmonthly fees charged to all cardholders, which in turn will benefitonly those cardholders that make the most intensive use of theseexpensive transactions, such as ATM withdrawals.

In short, Senator Menendez is forcing a version of theKardashian Kard on all America.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: Banking ChannelsDebitMerchant AcquiringMobile PaymentsPrepaidSocial Media

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    Making Real-Time Payments a Reality

    Fulfilling the Promise: Making Real-Time Payments a Reality

    July 10, 2025
    mortgage

    The Rich Benefits of In-House Payment Systems

    July 9, 2025
    digital cards

    Beyond Plastic: Why Digital Cards Are the Future

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025
    Rewire Acquires Imagen, Looking at Prepaid Cards for Migrant Workers

    Smells Like Team Spirit: What Makes Cobranded Credit Cards Work

    July 3, 2025
    uk banking outages

    New Continuous Strategies for Battling Account Takeovers

    July 2, 2025
    Fraud Monitoring

    What to Expect When Nacha’s Fraud Monitoring Rules Take Effect

    July 1, 2025
    payments

    Don’t Just React to What’s Next in Payments—Anticipate It

    June 30, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result