Product Code Database
A stored-value card ( SVC) or cash card is a payment card with a monetary value stored on the card itself, not in an external account maintained by a financial institution. This means no network access is required by the payment collection terminals as funds can be withdrawn and deposited straight from the card. Like cash, payment cards can be used anonymously as the person holding the card can use the funds. They are an electronic development of and are typically used in low-value payment systems or where network access is difficult or expensive to implement, such as parking machines, public transport systems, and closed payment systems in locations such as ships.
Stored-value cards differ from , where money is on deposit with the issuer, and credit cards which are subject to credit limits set by the issuer and are connected to accounts at financial institutions. Another difference between stored-value cards and debit and credit cards is that debit and credit cards are usually issued in the name of individual account holders, while stored-value cards may be anonymous, as in the case of . Stored-value cards are prepaid money cards and may be disposed when the value is used, or the card value may be topped up, as in the case of Telephone card or when used as a fare card.
The term closed-loop means the funds and/or data are physically stored on the token or card in the form of binary-coded data. This is unlike payment cards where data is maintained on the card issuer's computers. Like payment cards, value can be accessed using a magnetic stripe, chip or radio-frequency identification (RFID) embedded in the card; or by entering a code number, printed on the card, into a telephone or other numeric keypad.
The U.S. Department of the Treasury manages three stored-value card programs: Eagle Cash, and Navy Cash. Non-government stored-value cards include Aramark GuestExpress, Compass Zipthru, and Freedompay FreetoGo.
The German Geldkarte and the Austrian Quick card can also be used to validate a customer's age at cigarette .
Typical applications of organization specific or industry specific prepaid card include payroll cards, , gift cards, cafeteria cards and and U.S. based health schemes such as HSA cards. The EZpay, EagleCash, and Navy Cash cards are used by the U.S. military as electronic alternatives to cash in areas characterized by difficult access and limited banking or telecommunications infrastructure.
Stored-value cards can save organizations a considerable amount of money if customers add a large sum of funds at one time to the card and then pay a lower transaction fee for each use of the card on smaller purchases.
Generally, few if any laws govern these types of cards. Card issuers or sellers are not required to obtain a license. Closed system prepaid cards are not subject to the USA PATRIOT Act, as they generally cannot identify a customer.
As debts owed to consumers who purchased the card, these purchases remain on the books of a merchant as a liability rather than an asset. Consequently, gift certificates and merchant gift cards have fallen under state escheat or abandoned property laws (APL). However, the emergence of closed system prepaid cards has blurred the applicability of APL. North Carolina and Illinois have excluded these types of cards from APL provided the card has no expiration date or a service fee. Maine and Virginia require the issuer to pay the state when the cards are abandoned. In Connecticut an issuer is required to identify the residence of the gift card owner. Since most merchant gift cards are anonymous, the residence of the card's owner is deemed to be the state's treasurer's office.
Presently, no law requires a merchant to provide refunds for lost or stolen cards. Whether a refund is possible is specified in an issuer's cardholder agreement. In addition, most closed system cards cannot be redeemed for cash. When a cardholder redeems all but an insignificant portion of the card on merchandise, that amount is generally lost and is a windfall gain for the issuing merchant. The merchant also obtains a windfall gain if a card has an expiry date and the cardholder fails to use the full value by that date. Furthermore, the merchant has an interest-free use of the value until it is redeemed.
For example, in the United States, it is legal for anyone to enter or leave the country with money that is stored on cards, and (unlike cash in high amounts) does not have to be reported to customs or any other authority. Some members of the U.S. Congress are considering creating laws that would require travelers crossing, entering, or leaving the country to report these cards. The Financial Crimes Enforcement Network of the U.S. Department of the Treasury has published a notice of proposed rulemaking on stored-value cards in the June 28, 2010 edition of the Federal Register. The proposed rules would require sellers of prepaid cards to register with the government and keep records on transactions and customers.
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