The following statement can be attributed to Brian Tate, President and CEO of the Innovative Payments Association (IPA), on the April 1st effective date for the Consumer Financial Protection Bureau’s (CFPB) final rule for prepaid accounts:
“Since 2012 the prepaid community has engaged the CFPB in good faith to try to ensure the final rules protect consumers while continuing to foster innovations that allow customers to better manage their financial lives. The April 1st effective date for the prepaid accounts rule officially extends consumer protections to all prepaid based payment platforms like wallets and P2P products and will consider them as full-fledged bank accounts. It is important to keep in mind that the prepaid community was providing consumer protections years before the regulations were finalized. We encourage the Bureau to make sure their rules continue to keep pace with the innovation in the payments sector to make sure that all consumers have the opportunity to take advantage of the empowering opportunities created by prepaid accounts. The innovative prepaid community looks forward to working with policymakers to continue cultivating financial inclusion and consumer empowerment.”
More consumers are finding alternatives to traditional banking that empower them with new flexibility and capabilities. Even previously unbanked or underbanked consumers are discovering these innovative options and accessing all that the digital marketplace has to offer.
This holiday season, you probably noticed more stores with mobile payments options at the counter. The American consumer can use cash, cards (credit, debit or prepaid), and now even their phones or wearable tech. This rapid evolution in how we bank and shop reflects incredible innovation in the fintech sector, and policymakers, tasked with overseeing this growing market, have a tremendous challenge on their hands. Either keep up with the payments revolution or be out of step with how a growing number of their constituents are banking — especially millennials.