Founded in 2005 as the Network Branded Prepaid Card Association (NBPCA), the association originally was dedicated to the continued success of the open-loop prepaid payments industry. As the market evolved, it became clear that prepaid is at the forefront of payments innovation, serving as the platform for everything from mobile payments to wearables to the internet of things. In 2019, the Association, in collaboration with our members and Board of Directors, decided to rebrand itself, to recognize evolution of our members and the market.
The IPA’s focus took on heightened relevance as the payments industry readied for the final effective date of the Consumer Financial Protection Bureau (CFPB) Prepaid Accounts Rule on April 1, 2019. This rule created a new regulatory definition of “prepaid accounts” encompassing cards, online payments, mobile payments and wallets, wearables, and other products not typically understood as prepaid products.
The IPA worked with the CFPB throughout the nearly seven-year rulemaking process to ensure that the industry’s voice was heard and that the CFPB issued a Final Rule that both protected consumers are protected and allowed for innovation.
During the same timeframe the IPA recommended changes to the Federal Deposit Insurance Corp.’s FAQs on Brokered Deposits which became a priority issue for the IPA as soon as they were released by the FDIC in 2015 (the most recent version was issued on June 30, 2016). The FAQs unfairly treated prepaid deposits at FDIC insured banks and raised the costs associated with offering a prepaid card for participants across the prepaid value chain.
The IPA spent five years working with the FDIC to help them understand why the industry needed changes. In December 2020, the FDIC issued a Final Rule that modernized the agency’s brokered deposits regulations. These new regulations were an important step towards creating a brokered deposits regime that recognizes the innovation that has taken place in the payments industry in thirty-plus years since the brokered deposits regulations were first established.
In 2020, the COVID-19 pandemic presented the payments industry with challenges that had never been seen before and that required immediate responses and solutions. The IPA is proud to say that the payments industry stepped up to help local, state, and federal government agencies distribute emergency funds during our national emergency. Whether it was ensuring that Economic Impact Payments (EIP) and unemployment benefits were safely and quickly delivered to those most in need or keeping programs operational, the payments community – and in particular prepaid providers – showed why it continues to be a trusted product. The IPA believes that the importance of prepaid account products during the COVID-19 crisis underscores the significant consumer benefits offered by these products and services more generally.
As the industry worked hard to effectively respond to the COVID-19 pandemic, the IPA worked at the same time to support the industry’s immediate and long-term needs. The IPA stayed in regular contact with the CFPB, the House Financial Services Committee, Treasury, and IRS to ensure that these important regulatory agencies had an accurate view of how the industry was stepping up, the challenges IPA members were facing, and to ensure that the Association had the most accurate and up to date information to share with the membership.
As the Association looks to the future, it looks forward to welcoming companies from emerging segments of the FinTech world as members. The IPA’s experience guiding and advocating for the prepaid industry as it grew from an emerging product to a fully regulated and widely adopted product positions the Association to provide the same support for innovative products in today’s marketplace.