Breaking news! Epassporte shuts down Visa Electron card for all users

[italkcash]

The official msg goes like this:

Dear ePassporte Account Holders,

Please be advised that, at 12:00 PM PDT today, September 2, 2010, we were notified that effective immediately, Visa International has suspended our banking partner’s (St. Kitts Nevis Anguilla National Bank) ePassporte Visa program. The ePassporte e-Wallet program continues to be up and running, except funds cannot be transferred between your Visa Account and your e-Wallet. At this time ePassporte can no longer issue Visa Cards, and the ability for our Account Holders to make point of sale purchases and withdraw funds from ATMs has also been suspended.

At this time we do not know why this drastic action was taken by Visa. To us, it is unconscionable that such action would be taken without the opportunity for ePassporte to fully understand Visa’s reasons and to be able to take all steps necessary to keep our program running the way it has so successfully done for over 7 years. But that is what Visa has done.

[italkcash]

The reason for this move from Visa is most likely because of the new rules enforced by Treasury Department's Financial Crimes Enforcement Network (FinCEN).

New rules has come in place regarding debit pre paid cards, gift cards and reloadable top up cards. The rules, which were mandated by the Credit CARD Act of 2009, require more data collection and reporting from businesses, and some experts say they could make prepaid card buying a challenge for some consumers.

Starting June 28, the public will have 30 days to comment on the rules, which require nonbank prepaid card providers to:

File suspicious activity reports (SARs) with the government on suspicious activity of more than $2,000. Suspicious Activities Reports are Treasury Department forms already required of banks, casinos, poker rooms, securities and futures firms and others in the money services business. More than 5.6 million have been filed since they were first mandated in 1996 (see chart). The proposed rule would add nonbank card providers to the ranks of those required to file forms with the government when their suspicions are aroused.
Collect customer information anytime a card is reloaded at someplace other than a bank.
Maintain transaction information.

The rule focuses on the following:

Don't have the value clearly labeled on them.
Are reloadable at places other than banks.
Can have a maximum lifetime value of more than $1,000, including reloads.
Can be used anywhere -- especially if they can be used internationally.
Can have the value transferred to another card.
Are purchased in large amounts or seem otherwise suspicious.

Basically this is another terrorists anti-money laundry mumbo jumbo, but for now Epassporte is going to stay closed unless they will be able to comply with the new regulatations that came into force just a bit more than 30 days ago.

[italkcash]

There is clearly no doubt that Epassporte falls under the prepaid/gift card rules as they issue cards without being able to perform sufficient due diligence. Since Epassporte can be used by anyone in the world without anyone being checked, Epassporte will probably see the end of its operations for a long time to come.

[ametists]

You think all money is loss for epassporte users ?

[italkcash]

If you have less than 50$ in the account its not even worth doing a wire transfer out. Unless Epassporte finds a way to comply with the new rules the money more or less belongs to them in an upcoming bankruptcy.

[Capt 30]

Epass tech support and their rep told us yesterday that the issue was a technical problem that would be resolved in 24 hours. We have about another 9 hours to go to see what happens.

[italkcash]

That is a contradiction to the official statement by Epassporte though....

Once Visa shuts something down they have checked it over 10 times. The issue is legal because of the new law, Epass will probably stay shut for the next many months.

[Capt 30]

I'm only telling you what Epass told me. As I said, we'll have to wait and see.

[italkcash]

Epassporte functionality that some may not know of:

All money that are kept in Epassporte are NOT, Visa. The two has nothing to do with each other. The gimmicks with Virtual Visa etc. has nothing to do with Visa. All money are at all times kept in the very same bank that Epassporte works together with.

All money are kept in the bank, which Epassporte uses as their intermedia for Visa as they do not directly hold any Visa license.

Epassporte holds an Deposit-taking business license on St. Kitts.

Since the bank that works together with Visa has lost their license, which in turn is due to the new regulations, Epassporte cannot issue new cards before they:

A) Find a new bank

B) Get a direct license from Visa, which they wont as Visa only works directly together with Banks

[Capt 30]

Originally Posted by italkcash

Epassporte functionality that some may not know of:

All money that are kept in Epassporte are NOT, Visa. The two has nothing to do with each other. The gimmicks with Virtual Visa etc. has nothing to do with Visa. All money are at all times kept in the very same bank that Epassporte works together with.

All money are kept in the bank, which Epassporte uses as their intermedia for Visa as they do not directly hold any Visa license.

Epassporte holds an Deposit-taking business license on St. Kitts.

Since the bank that works together with Visa has lost their license, which in turn is due to the new regulations, Epassporte cannot issue new cards before they:

A) Find a new bank

B) Get a direct license from Visa, which they wont as Visa only works directly together with Banks

Exactly! That's what I was told by the specialists at the news bureau I work with. However, St. Kitts may have lost their license but Epass had the option of a Plan B which may have gotten tied up in some technical issue or red tape. The bigger issue here is that St. Kitts got the hammer put down and considering the magnitude of the contracts St. Kitts has with government it may be, just may be, an indicator of something even bigger going down. It doesn't mean Epass hasn't already found another bank. No reasonable bank is going to turn Epass down. Too much money to be made, however those new banks may be asking for negotiable terms Epass has to surrender to.

It sounds like Epass was taken by surprise because they thought they were in compliance with what VISA wanted and some glitch popped up. It's up to Epass, St. Kitts, and VISA to resolve it and if it's not of a major issue but some "i" not dotted or some "T" not crossed then we'll all be in the front seat of seeing how that end of this industry operates, find new options, adapt, and move on. I have been scanning your site here and found options I was unaware of! That's a major plus point as we all need to be aware of what options there are for security and efficient business operations. Thanks for the site!