JPMorgan Chase says it plans to pull out of the pre-paid card business just a month after the bank confirmed that hackers had broken into its servers and put the personal information of around 465,000 cardholders at risk.
Why just pre-paid and not banking altogether?.. I guess that hacking event has nothing to do with the decision re pre-paid.
Pre-paid is hard to turn into a profitable exercise with the "legacy" mentality (O2 are shutting down their wallet for a similar reason).
I was referring to the payment part of O2 "wallet" (which it never was...) - it was based on a prepaid card.
As for the push of credit products by Chase (or any major US bank for that matter), it's more to do with Durbin than consumer's "prosperity" - i.e. it's the bank's preference, not the consumer's.
Depends on your definition of a "wallet". You could install multiple payment cards for e-commerce use or the loading facility for the prepaid card/account. It wasn't the best implementation but it certainly wasn't the worst I have seen. It was basically
a partner app for the physical plastic. Where it failed was the lack of a Mobile NFC functionality - which is where I believe WEVE will come in (cross telco/multiple device support - starting with, I assume, Samsung Galaxy S3/S4 etc).
Durbin may have played a part in the JPMC decision (pressure on Interchange Income) but all the more reason to push/incenitivise consumers to Credit Card portfolios.
Weve is no more...
And none of the existing players (apart from your humble) can yet link SE-based products to e-comm transactions for "card present" flow...
Never been a big believer in prepaid. How soon history alltogether?
There are two aspects to this story, which make it a very much avoidable mishap.
Firstly, whoever designed the security of the server should choose an alternative career. It is perfectly possible to make a Unix server bulletproof to external attack (I say 'Unix' because anyone who runs important content on a Wintel box needs professional
help). I would guess that JPM's server ran software written in something like WordPress, cPanel, Joomla, Java or some other highly exploitable interpreted language, which permitted the hackers to bypass the authentication layer.
Secondly, a lot of the blame for any bad consequences must rest with whoever designed the authentication system for the cards themselves. Had they used a modern systerm, the loss of the card data would have been a trivial occurrence, since the data would
be worthless to a thief.
There is a reason why prepaid can be more vulnerable: many prepaid programmes are part of relatively complex (compared to, say, a debit or credit card programme) solutions are put together involving more than just card processing and typically involve a
number of external providers for, say, card loading, and external parties in operational roles, such as employers loading the cards for payroll payments.
The breadth of application is what makes prepaid compelling but also challenging. See my blog post for more on this http://www.finextra.com/blogs/fullblog.aspx?blogid=8789
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