What is a Stored Value Card?
A stored value card (SVC) is a credit card-sized plastic card with an integrated circuit embedded in it. This embedded circuit allows the card to store information and perform certain transactions when inserted into special devices designed to read and process the cards. Transaction security can range from low to high, depending on the pre-determined application of the card. Although stored value cards can be used to support a variety of applications and perform a variety of functions, the ones developed and supported by the U.S. Department of the Treasury are used primarily to perform financial transactions.
Why Use a Stored Value Card?
The Bureau of the Fiscal Service has developed a number of SVC applications designed to improve financial controls and cash-management applications, streamline administrative processes, and improve the quality of life of cardholders. Stored value cards are low-cost and efficient. They are used to:
Who Uses Stored Value Cards?
Stored value cards are an attractive alternative for organizations that want to limit the circulation of cash, and reduce the expense and administration of processing credit cards and checks. Federal Agencies currently using SVC applications include the Army, Navy, Air Force, and Marines. SVC systems are deployed and operated on Army,Air Force, and Marine bases in the U.S. supporting basic training operations, overseas supporting military combat and peace keeping operations in contingency areas of operations as well as on ships at sea. SVC cards can be used as payment in post exchanges, post offices, ships stores, local base vendors, vending machines, and at Morale Welfare and recreation facilities (MWR).
How Does a Stored Value Card Work?
Typically SVC cards have no value until they are activated and have funds placed on them electronically. Value can be added to cards in a number of ways, including payroll or other financial file transfer, from a credit or debit card, or from cash or checks. A card is considered "active" once it has been assigned to an individual and loaded with financial value. Depending on the application, different types of cards can be issued. "Disposable" cards can be used to purchase goods and services up to the value remaining on the card and discarded when the value is fully expended. "Re-loadable" cards are issued with an initial value and are capable of having additional value added to them at the cardholder's direction. Some SVC cards have the added ability to also serve as a debit card, allowing cardholders access to ATM's and merchants around the world who accept debit and credit cards.
Both the SVC and the back-end financial system processor keep track of the balance on the card and systematically perform an accounting and control function.
How Big is the Stored Value Program?
Since the program's inception in 1997, approximately 4 million cards have been issued and placed into service representing over $3.9 billion in value. Annually, over 80 million retail transactions are performed with merchants on military bases and ships around the world.
How Secure are Stored Value Cards?
Security is one of the great advantages of Stored Value Cards. The cards use multi-layered, integrated chip circuitry to control access to funds. This technology is more secure than the mag-stripe technology used to authenticate credit and debit card transactions. Both the card and the user can be authenticated using a combination of encrypted security "keys" and user PINs.
What Do Stored Value Cards Look Like?
Who Supports These Stored Value Prpgrams?
SVC programs are developed and managed by the U.S. Treasury, Bureau of the Fiscal Service and supported by Federal Reserve Banks, Commercial Banks, and other qualified intermediary fiscal and financial institutions who are designated as fiscal and financial Agents of the Treasury. All programs are developed in close cooperation and partnership with the various government agencies the program is meant to support.
Who Can I Contact for More Information?