Since their introduction in the early 1990s, general purpose reloadable (GPR) prepaid cards have evolved to become one of the fastest-growing consumer payment instruments in the United States. Although these cards were at one time lightly regulated and lacking in risk controls and measures, which made them conducive for money laundering, regulatory measures and industry-wide risk management practices have evolved to mitigate the money laundering risks associated with these cards.

This paper examines both the regulatory response and the adoption of risk measures by the industry to minimise the attractiveness of GPR prepaid cards as a money laundering instrument. However, these risks still exist within this industry, and the concerns of law enforcement officials are warranted. Namely, the regulatory and industry responses seen in the United States have not necessarily been adopted in other jurisdictions. The risks of money laundering with GPR prepaid cards issued outside of the United States are thus higher, and they should be of concern to law enforcement agencies and officials.» Download the document now 356.6 kb (PDF File)