ANSWER TO PARLIAMENTARY QUESTION ON: Stored Value Cards
For Parliamentary Sitting on 23 Nov 1999
Question: To ask the Deputy Prime Minister (a) whether it is proper practice for the issuers of stored-value cards to claim administrative difficulty as a reason why their cards must expire after a certain time and all the money remaining therein unusable by the cardholder from that expiry date; (b) whether the Minister will introduce measures or legislation (i) allowing the cardholder to claim a refund of the monies; and (ii) obliging the card issuer to forward monies remaining in the card, of which the owner is untraceable, and the interest earned, to the state rather than keep it for the card issuer's own use.
Answer: 1. Currently a host of proprietary stored value cards are in use. These cards can be broadly categorised as single purpose stored value cards or multi-purpose stored value cards. There is no uniform practice with regard to the validity period of these cards or the treatment of unused balances. The decision to impose an expiry life on cards is based entirely on commercial and practical considerations, for example the physical wear and tear or obsolescence of these cards. For security reasons, stored value cards such as those embedded with smart chips are typically designed with a definite life span. This is because access to "electronic purses" on these cards are controlled by cryptographic keys which, through time and technological advancement, may be duplicated, compromising the security of the smart card. Limiting the duration of a card's use reduces the possibility of a security breach. In these respects, stored value cards are similar to prepaid vouchers with validity periods.
2. Under the current legislative framework, MAS has responsibility over the issuance of multi-purpose stored value cards (for example, the popular CashCards) only. MAS views monetary values in these pre-paid stored value cards or any unused balances on these cards no different from deposits. MAS expects issuers to make every effort to identify and repay deposits of the card or account holder. Although expiry of these CashCards effectively means that they will no longer be accepted at points-of-sale i.e. cardholders cannot effect purchases via the stored value cards, cardholders can nevertheless redeem unused balances on their expired CashCards.
3. On the other hand, the treatment of single-purpose stored value cards such as TransitLink's farecards are based on commercial considerations and differ among the various card issuers. The Ministry of Communications and Information Technology is aware that consumers have raised various issues concerning TransitLink farecards, and is looking into them.