After many false starts in recent years, the advent of electronic money appears to have arrived. New and more innovative ways of transferring funds are rapidly being made available to us. Electronic money as most consumers know it consists of credit cards, automated teller machine cards, debit cards, and prepaid cards used for public telephones, buses, subways, highway tolls, and other necessities. The newest entrant on the scene is the first generation of computer chip-based stored-value cards.
These advances in electronic funds transfers pose a significant challenge to financial institution regulators for, as our economy shifts from a paper-based system of moving funds to an electronic-based system, technology threatens to outpace existing laws and regulations. Stored-value cards offer an instructive example of some of the issues this new technology poses for regulators.