Jim Schlegel, a senior product manager at ACI Worldwide of New York, which creates and manages electronic payment systems for banks and major retailers, said the new rules are well-intentioned, but he questioned just how big a problem money laundering through prepaid cards really is.
It's "such a small percentage of the overall problem, and attempts to propose very heavy legislation and requirements around it put a drag on an otherwise growing and profitable sector," he said in an interview.
Law enforcement agencies and banking regulators acknowledge that there's no way to know how much money is being moved undetected across U.S. borders through the cards — that's the point of money laundering, after all.
But in a report late last year on money laundering and cross-border currency smuggling, the Government Accountability Office cited the Treasury Department's 2005 assessment to urge action to crack down on misuse of prepaid access cards, saying it was convinced that the shuttling of criminal proceeds across the border, "whether in the form of bulk cash or stored value" (on prepaid cards), poses "a significant threat to national security."
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