American Express Launches PASS - Prepaid Reloadable Card for Teens
American Express yesterday launched PASS - "a prepaid reloadable Card parents give to teens and young adults, providing peace of mind to parents as a safer alternative to cash, credit and debit cards. PASS, which will be sold and marketed exclusively to adults, is currently available as a preview to American Express Cardmembers and will be available to the general public this summer."
"With PASS, teens don't have to carry large amounts of cash and there's no risk of overspending," said Alpesh Chokshi, president of American Express's Global Prepaid business. "While this might be driver's ed for the teen's wallet, parents are in the driver's seat with PASS. Online tools help manage an allowance, track spending and receive alerts when balances are low. As a result, parents have a better way to provide spending money and teens can be on a safer path toward financial independence."
A parent must purchase and register PASS online at http://www.americanexpress.com/pass. Funds can be loaded through an American Express® Credit or Charge Card. Loading through a savings or checking account will be available when PASS launches to the general public. PASS can be used virtually anywhere that accepts American Express Cards.
Explain why this is safer than credit or debit cards.
Does it have a chip on the back, or still a magnetic stripe?
I'm hoping for a technical answer.
Thanks!
Rivka Tadjer
Posted by: Rivka Tadjer | May 04, 2010 at 08:15 AM
To answer Rivka's comment: prepaid cards are safer than credit or debit cards from a use mode standpoint, especially for parents:
1- unlike debit cards, they are not linked to a checking account that could be emptied via the card and could go in overdraft and generate unexpected fees
2- unlike credit cards, they won't end up creating a bad credit record for the teen (or the parent if a co-signer) in case the teen mis-behaves. This point is relatively moot since the enactment of the CARD Act, which reduces access to credit cards for anyone below the age of 21 in the US.
I don't know about Amex cards, but Visa teen prepaid cards come with the zero liability policy of Visa for signature purchases at the POS: you don't lose the money spent by a thief at points of sale if you lose the card and signal the loss.
In a nutshell, the "safety" mentioned about the Amex PASS card has nothing to do with "security" that could come from technical elements like chips.
My own company does a teen card with a "suspend my card, I have lost it" function available from any web enabled phones, because teens tend to lose things....
This is the kind of safety that parents should be concerned about.
Posted by: Patrice Peyret | May 05, 2010 at 08:07 AM
Patrice- what are the benefits to your companies card as opposed to Visa Bux or Mastercard's Myplash program?
Posted by: Jay Butler | January 13, 2011 at 02:24 PM