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Visa beefs up prepaid fraud prevention with PCS

March 3, 2014

Visa Inc. has completed technical development of a new service designed to detect and prevent fraud schemes involving prepaid cards. The company's prepaid clearinghouse service aims to provide critical information sharing to better identify and stop fraudulent enrollments, funding and use of prepaid cards.

In a press release, Visa said that PCS provides a centralized database where FIs, processors and prepaid program managers can share prepaid card data, information about suspected fraudulent activity, and reported fraud on existing card accounts.

PCS participants will have access to a holistic view of prepaid fraud across the industry, enabling them to detect and protect their customers and their portfolios from fraud efficiently and effectively.

"Fraud is a constant threat for prepaid program managers, so being forewarned of what attacks are happening across the industry can help them prepare their defenses," said Ben Jackson, senior analyst for the Mercator Advisory Group prepaid advisory service.

Brian Triplett, Visa SVP and head of North America prepaid products, said that PCS will deliver comprehensive account-level data from across the industry in order to help reduce prepaid fraud losses for consumers, financial institutions and their clients.

"Criminals are increasingly targeting prepaid products, which more and more consumers are using for everyday purchases," he said. "While existing laws and industry safeguards help limit most consumer losses, PCS is a huge step forward for the industry towards proactively preventing fraud schemes targeting prepaid cards."

All U.S. Visa-issuing FIs and program managers will be required to begin reporting information into PCS by June 2015. Besides Visa, the system supports multiple network-branded prepaid cards, the company said.