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Paul McNamara

Buy prepaid credit cards without an ID or age limits?

What could go wrong?

By Paul McNamara on Mon, 02/12/07 - 1:08pm.

Prepaid credit cards for those without bank accounts and teens without self-control have been available in the U.S for years. Now, Visa New Zealand, in cooperation with that country's postal service, is taking the concept to a new level that promises a measure of protection from online identity theft, but also the prospect of abuse by young people looking to access adult services, and criminals needing a cloak of anonymity.

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Moreover, Visa says these prepaid cards are becoming a "de facto" means of conducting commerce online, according to this press report from New Zealand. The company is anticipating the market for them to move well beyond gift-giving and those who otherwise cannot get regular credit cards.

Whether this evolutionary change in prepaid cards will be moving to a Post Office branch or convenience store near you is a question I asked the Visa U.S.A. public relations department earlier this morning. No reply as of early afternoon. (Update: They got back and are working on getting me "the right person." ... Tuesday morning: Must still be looking.)

Called the "Prezzy Card," New Zealanders may buy them preloaded with an amount between $25 and $500 at any postal outlet - without providing any identification or proof of age. Although cash purchases are limited to $100, the stipulation seems little deterrent to an individual interested in amassing a kitty of untraceable online currency.

From the press report:

NZ Post (the postal service) has marketed the prepaid card primarily as an alternative to gift vouchers or giving cash, branding it as the "Prezzy Card". But Visa New Zealand country manager Iain Jamieson says it is already clear that prepaid Visa cards have a far wider market and are emerging as a "de facto" tool for online shopping.

Customers key in the number and expiry date on the card when buying online, as with a standard credit card, and type "prezzy card holder" into the name field, if required.

NZ Post has so far sold 40,000 Prezzy Cards and more than 10 per cent of the transactions have been online purchases, Mr Jamieson says. About 5 per cent of standard credit card transactions are made online.

But it's the bigger picture that holds more interest here, both for Visa and those who may see trouble brewing in such services.

Mr Jamieson says prepaid cards are Visa's fastest growing payment product internationally, outstripping credit and debit cards, with $70 billion processed to date.

Here in the U.S., parental controls are not only a staple of prepaid credit card programs such as Payjr Prepaid MasterCard and Visa Buxx, they are marketed to parents as a primary justification for caving in to a child's craving for plastic. If teens can load their allowance and after-school job earnings onto plastic that is free from any oversight by Mom and Dad, one would guess that such an arrangement would prove popular with young people - if not their parents.

As for which merchants will or will not accept such anonymous payments - porn sites, gambling venues, etc. - that's another can of worms. According to the New Zealand press account, Visa does not mandate any age verification by online merchants who accept the cards.

So, is this a good thing, a bad thing, or just a thing?

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