Will EMV technology make prepaids too expensive to issue?
Chip-and-pin technology in prepaid cards would have made the recent $45 million bank swindle virtually impossible to pull off, given that there would be no way to counterfeit prepaid cards using data swiped from online databases.
And there's no question that overall, transactions worldwide would be more secure if every one of them were made with a chip card. But, said commentator Lanny Byers, co-managing director of CHYP USA in an American Banker commentary, "[W]ho ends up paying for the additional plastic cost ... for products that already have a relatively short life span."
Byers proposes two possible ways around a very real problem: "Either prepaid will move to mobile or prepaid will have to be repositioned toward a more value-added proposition."
"Visa expects that by 2020 half of its overall volume will come through mobile ... Maybe it's time to use that extra $1 cost as the impetus to start that shift now," Byers said.
Is it?
Read more about EMV.