MasterCard has announced the launch next month of a prepaid credit card.
The MasterCard cashplus card is a new initiative in the UK and will work much like a prepaid mobile phone. Users will top up the card with cash and be able to use the card anywhere that the MasterCard logo is displayed.
The project has been undertaken in the UK as a partnership with Advanced Payment Solutions (APS) and the card is aimed at those who are disqualified from traditional banking services such as credit cards, or those who do not have a bank account.
Rick Wagner of APS said: “There are nearly eight million people in the UK without a bank account or a credit card and this is the market we are aiming at. These people can’t buy goods over the internet, can’t reserve hotels or hire cars and if they lose their money it is gone. With the card it is secure.”
The cashplus card has been phenomenally successful in the US, with an estimated 1.4 billion cards in circulation. However, some analysts have criticised aspects of the card such as the card issue fee, and are sceptical of any success in the UK.
Sandra Quinn, director of communications at Association for Payment Clearing Services, commented: ” I can’t see Brits being willing to pay for the cards when the majority of people can qualify for basic banking facilities at least.”
MasterCard is currently appealing a ruling by the Office of Fair Trading (OFT) that the fees charged by MasterCard UK members, including some major banks, were anti-competitive and resulted in higher retail prices for consumers.
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