Cashplus touts prepaid as online fraud deterrent

U.K.-based Advanced Payment Solutions, the program manager for the Cashplus Prepaid MasterCard, believes prepaid cards are superior to credit and debit cards in minimizing the risks of online fraud for consumers. Unlike credit and debit cards, prepaid cards limit cardholders' exposure to fraud because the only funds at risk are the funds loaded onto the cards, APS said.

"If a customer tops up the card with £100, and he or she becomes the victim of an online card fraud, that's the most the customer will expose," APS noted in a statement. "And with secure access to their transaction information 24/7 online, any suspicious activity can quickly be spotted by the cardholders."

In contrast, online shoppers who use credit cards may be exposing their entire credit limits to fraud, APS said. Debit card usage online may increase potential negative consequences, as hacked debit cards allow fraudsters access to consumers' bank account information.

"With a debit account, the disruption that fraudulent card use could cause could be even more serious – missing payments for everything from a mobile phone contract to a mortgage could have huge consequences, especially if the account involved has a large overdraft facility," APS stated. The program manager cited statistics that show 70 percent of online shoppers are concerned about the security of their payment data online, and that over 33 percent of all consumers have been victimized by online credit card fraud.

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