Q: Does a general-use prepaid card qualify for the exemption under § 235.5(c) if a cardholder may present the card at a branch of the issuer to withdraw cash from the funds underlying the card?
A: Yes. A general-use prepaid card is eligible for the general-use prepaid card exemption in § 235.5(c) if a cardholder is able to present the card at a branch of the issuer and withdraw cash from the funds underlying the card, provided the cardholder is the person receiving the cash. This is true whether the issuer sends the transaction information through the card network or effectuates the transaction without using the card network. (Added March 13, 2013)
This Q&A was obtained from FRB’s website, in a section for Regulation II (Debit Card Interchange Fees and Routing) Frequently Asked Questions, which may be found here: