Electronic payments: SBP issues prepaid card regulations
Move aimed at achieving greater financial inclusion
Move aimed at achieving greater financial inclusion. CREATIVE COMMONS
KARACHI:
The State Bank of Pakistan (SBP) issued on Monday Prepaid Card Regulations aimed at promoting electronic payments by introducing alternative digital means of payments and achieving greater financial inclusion.
A prepaid card is a payment instrument built around a pay-early-spend-later model rather than the pay-now and pay-later models used in debit and credit cards, respectively.
According to a statement issued by the central bank, prepaid cards are considered ideal for giving unbanked segments of the population a flavour of formal financial products without the need for opening a formal banking account.
Prepaid cards are being promoted as an alternative to a transaction banking account, as its features resemble those offered in transaction banking accounts.
Prepaid card customers may withdraw cash and transfer funds from ATMs, pay exam fee, shop online and travel abroad without requiring or compromising the debit/credit card.
These regulations have been developed in line with the international recommendations, such as those issued by the Financial Action Task Force, to minimise the anti-money laundering/countering the financing of terrorism risks associated with the prepaid cards by covering relevant aspects, like the issuance of prepaid cards, permissible load limits, restriction on use, dispute resolution and consumer protection.
Furthermore, in order to promote card usage in the domestic market, financial institutions are allowed to offer prepaid cards through authorised agents.
“These regulations will enable banks in Pakistan to develop the prepaid card market in order to provide more payment options to the unbanked population while at the same time take steps to ensure safety and customer protection as per international standards,” the statement said.
Published in The Express Tribune, May 10th, 2016.
The State Bank of Pakistan (SBP) issued on Monday Prepaid Card Regulations aimed at promoting electronic payments by introducing alternative digital means of payments and achieving greater financial inclusion.
A prepaid card is a payment instrument built around a pay-early-spend-later model rather than the pay-now and pay-later models used in debit and credit cards, respectively.
According to a statement issued by the central bank, prepaid cards are considered ideal for giving unbanked segments of the population a flavour of formal financial products without the need for opening a formal banking account.
Prepaid cards are being promoted as an alternative to a transaction banking account, as its features resemble those offered in transaction banking accounts.
Prepaid card customers may withdraw cash and transfer funds from ATMs, pay exam fee, shop online and travel abroad without requiring or compromising the debit/credit card.
These regulations have been developed in line with the international recommendations, such as those issued by the Financial Action Task Force, to minimise the anti-money laundering/countering the financing of terrorism risks associated with the prepaid cards by covering relevant aspects, like the issuance of prepaid cards, permissible load limits, restriction on use, dispute resolution and consumer protection.
Furthermore, in order to promote card usage in the domestic market, financial institutions are allowed to offer prepaid cards through authorised agents.
“These regulations will enable banks in Pakistan to develop the prepaid card market in order to provide more payment options to the unbanked population while at the same time take steps to ensure safety and customer protection as per international standards,” the statement said.
Published in The Express Tribune, May 10th, 2016.