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Stored value facilities (SVF) are prepaid instruments that can be used for the payment of goods or services up to the amount that has been stored in the instrument.
There are two types of SVF, namely single-purpose and multipurpose SVF. A single-purpose SVF can only be used for the payment of goods and services provided by the issuer of the SVF, and not by any third party. An example of single-purpose SVF is the prepaid telephone card, which can only be used to pay for telephone services provided by the issuer.
On the other hand, a multipurpose SVF can be used for the purchase of goods and services provided by the issuer as well as third parties. The ez-link card and Nets CashCard are examples of multi-purpose SVF.
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MAS only approves widely accepted SVF (WA SVF), which are multi-purpose SVF with total outstanding stored value of $30 million or more. The entity that holds the money collected from users of the WA SVF has to be approved by MAS.
A bank must also be fully liable for the money collected. Presently, the ez-link card and Nets CashCard are the only two WA SVF approved by MAS.
For SVF with total outstanding stored values below $30 million, MAS' approval is not required and any entity can issue such SVF. Single-purpose SVF schemes also do not require MAS' approval.
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All SVF issuers should disclose to their users the terms and conditions of their SVF and the procedures for usage and refund.
Before buying any SVF, you should seek to fully understand how the product works, the fees and charges payable, your rights and responsibilities, and the risks you assume in using the SVF.
You should ask for written information on the product and read the documents and fine print carefully before buying.
The Payment Systems (Oversight) Act 2006 requires issuers of SVF who are not approved by MAS to provide written disclosure to potential users that they are not subject to MAS' approval.
The terms and conditions for SVF may vary from one SVF to another. Below are some factors you should consider before purchasing any SVF:
a) Refund and replacement procedures: The issuer should indicate clearly whether the SVF can be refunded or replaced. Find out what the procedures are and, if any, the fees and charges for refunds and replacements;
b) Expiry dates: Most SVF have expiry dates. Check the expiry dates when purchasing any SVF. Issuers should have clear refund and replacement procedures for expired SVF; and
c) Load limit on stored value: All SVFs have load limits, which is the maximum value that the SVF can store at any one time. A higher load limit allows for higher value purchases. However, the potential monetary loss is also greater if you lose the SVF. Load limits should not exceed $1,000 for most SVF.
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The fees and charges of a SVF are determined by the issuer of the SVF. The issuer should disclose and explain the fees and charges to you. Some issuers may impose fees for refunds, replacements, top-ups or other services. As mentioned earlier, you should find out all applicable fees and charges before purchasing any SVF
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SVF issuers should have adequate dispute resolution channels and resources to deal with disputes in an impartial and timely manner. If you are dissatisfied with the outcome, you can also raise the issue with independent dispute resolution bodies such as the Consumers Association of Singapore, Singapore Mediation Centre or Small Claims Tribunal.
If the dispute cannot be settled, you may wish to file a claim in court under the Consumer Protection (Fair Trading) Act for civil remedies. You can refer to the Ministry of Trade and Industry's website for more information on the Act.
Generally, taking legal action should be the last resort as it can be a time-consuming and costly process. If you wish to engage a lawyer to take legal action on your behalf, the Law Society maintains a list of all registered lawyers in Singapore.
You can also seek help from the Legal Aid Bureau if you satisfy the Bureau's conditions for assistance.
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For a WA SVF, a bank will be fully liable for the total outstanding stored value. For other SVF, you may have to commence court action against the issuer. You can minimise your potential losses by taking the precautionary measure of not storing large amounts in any SVF.
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