I am often asked by newsagents if they can sell prepaid Visa cards. Touch Networks offers access to Just4 Visa Gift Card in $50 and $100 through its relationship with Blackhawk. Newsagents have access to Blackhawk products through Touch regardless of the computer system they use.
Lots of risks with prepaid credit cards – especially when it’s paid by another credit card. I have lost quite a lot of money from credit card fraud from fraudsters who use stolen cards to buy prepaid credit cards. Despite the card going through without a hitch initially, the bank eventually refused to honour the transactions.
CSW but wouldn’t that go for any sale ,if the bank doesn’t honour the sale then whats the difference on what they purchased .
We got done a few weeks ago thief purchased a heap of gift cards , lotto and scratchies worked his way around the whole town .As far as I know all sales still went through . Not much you can do when a signature matches up or they don’t have to put anything in at all
csw,
Under what premise did the bank refuse to honour the transaction? I’m unsure of how they would be able to do this short of a store not complying with any requirements under their merchant agreement.
The bank refused to honour the transaction on the basis that the card was stolen and signature was forged – which we would have had no way of knowing. The fraudster made off with a few prepaid credit cards valued at $1000 each those prepaid credit cards were available through Bill Express.
csw I’d have pursued this vigorously through the banking industry ombudsman and other avenues. I am certain you should not have paid this.
We trust that the Banks will be approved to have PIN only transactions. Submissions closed last week for them to make their case for implementation in Jul 14. The case revolves around the Banks losses through signature fraud. We have a sign on our Tyro saying PIN@POS that we can use if we are doubtful as we did a couple of days ago when two guys wanted us to “test”if they had funds with card before they purchased a phone recharge. We told hem to go the Bank opposite but they went in the opposite direction.
Swipe and go and no pin or signature would have to be one of the dumbest ideas known to man kind ( well probably a few other dumb ideas) criminals must be loving all these fast ways to do a transaction .
Shaun’s,
Actually, the $35 low value transaction and the tap and go technology are there to remove the use of signatures and increase security for card users .
The amounts that can be withdrawn without a pin are relatively small (much smaller than the limits on a signature purchase). This encourages people to use their card instead of cash, and limits the opportunity for theft. The banks also provide a guarantee for fraudulent use of a card where it is used without a pin.
Signatures for payment are the dumbest idea known to man.
Credit cards went from signatures (reasonable security) to pin numbers (better security and safer for the retailer) to tap and go (no security). Sure the banks are happy to guarantee the transactions as they will pass the costs onto us in some manner anyway. As for buying Credit Gift cards on credit, Australia Post only accept cash for money orders, perhaps we should operate the same way. Prepaid Credit Cards are far different to other stock in that from the theifs point of view they are getting away with cash to spend as they wish so this is a far more attractive product for them to target.
Brendan,
Signatures offer no security. Anyone can forge a signature well enough to convince a sales person … and that’s if they check it (they often don’t).
Cash is both easy to physically steal and much harder to trace once it’s gone. There are large costs associated with cash handling.
Because the allowable value of a no-pin transaction is much lower than a signature transaction, there may very well be a smaller total value of claims, thereby reducing the banks costs.
Even if there is an increase in the value of the claims, the banks many not actually have to pass on the costs. By making electronic payment simpler and convenient they reduce the need for people to withdraw cash. Doing this ensures people keep their cash in the bank longer – increasing the deposit assets available to the bank (assets from which they can make profit).
Jarryd,
Automatic used to be free as they lowered staff costs, we now pay through the nose to use them. The banks will charge for any thing they can, it’s what they do. Give them a few years, if not sooner, to justify it and they will charge us for any fraudulent use of tap and go cards. One way or the other we will pay, again that’s just how the banks operate. History proves this.
“Automatic tellers”
Brendan,
In the bank’s defence, ATM operation isn’t cheap. There is rent for the space (and we all know how expensive that is), maintenence costs and the expense of having heving them filled with cash.
Cards that include tap & go technology are actually just a stepping stone to embedding that same technology into phones. The way in which this operates is the most secure of any method (given that the phone itself has a number of built-in security measures).
There is simply no evidence that banks would attempt to charge stores for fraudulent transactions. If they could, why aren’t they already doing this on a large scale?
I would suspect there may be legislation preventing them from doing so, or if they were to begin this practice that such legislation would be swiftly introduced given that retailers have adopted the technology on the basis that they are not liable for any fraud.
You do already pay for the tap and go technology.
Most banks that offer it on their EPOS equipment charge a slightly higher unit rental or transactional fee on their equipment that is enabled to accept the taps.
Paul,
Most banks are phasing out terminals that don’t have the technology. I would imagine that a number of providers will already have removed all non-contactless terminal options for new installs and upgrades.
A believe a number of the banks actually rolled out the terminals with no cost to merchants. We’re with CommBank and didn’t pay any additional fees for the reader attachment.