Jun 10, 2013 Sean Albert
Major retailers such as Wal-Mart have broken into the financial services industry in recent years. By offering prepaid cards, these companies have been successful in profiting from one of the fastest growing forms of payment currently available.
However, some financial representatives have urged the federal government to limit the sale of these alternative payment products by retail outlets. According to Bloomberg, the Federal Advisory Council singled out Wal-Mart's sale of prepaid cards for lacking government oversight at a December 19 meeting. The source stated that the minutes from the event were recently received under the Freedom of Information Act.
As noted by Bloomberg, federal interchange regulations do not apply to prepaid cards, which bankers say gives Wal-Mart an advantage, as the company's sale of the products goes unregulated. However, representatives from the Arkansas-based retailer claim its prepaid sales are properly addressed by current laws.
A reform of prepaid regulations and sales availability may result from the current debate but it's unknown just how potential changes in federal law would affect the market. Currently, electronic payment technology use is booming across the nation.
In its annual prepaid card forecast, the Mercator Advisory Group estimated that the value of the emerging market will jump to $672 billion during the next three years. In 2009, there was $330.03 billion put on the alternative products, the source said.