The proliferation of prepaid card programs in Europe has prompted the European Monetary Institute to explore the need for central bank oversight. A report to the institute last year from the Working Group on EU Payment Systems, now making the rounds in U.S. regulatory circles, recommended a central role for banks as issuers of the cards. Following are slightly edited excerpts from the report:

Over the years, payment with cards has become common practice in most European Union countries as a method of gaining access to funds held in a bank account or to an agreed credit line.

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