Stored Value Cards, Prepaid Debit Cards and Apple Pay

Alarm bells are going off in my head in the middle of last night but I don't really understand the urgent nature of the alarm nor where the fire is.  Cause for alarm seems to be the prior post in this blog that considers the possibility of Apple Pay to user in a new monetary system?  Apple does big stuff but a new monetary system.  This is Big Stuff.  Apple and Revolution have a history.

Apple has a new slick device, iPhone 6 that is a bells and whistles front end to entering the old horse and buggy credit card clearing house system associated with the two big banks.  That is big.  That is the up front publicity.  What is back in the shadows?  Something that is bigger than just a front end to the established credit card world?  The "money" that is not connected to credit/debit clearing house financial function credit card companies called Master Card and Visa and the big banking system players they clear transactions for?

Stored Value Cards.  That is what sets off some alarm bells in my head while I was asleep last night.  They were so load they woke me up with the thought:  Am I missing something alarming here?

A stored value card has the value of the card stored on the card.  No connection to an account is required to validate or "spend" the money value stored on the card any more than a connection to an account is necessary to spend a paper dollar bill.  Spend a dollar bill and you do not have anything left.  You gave it to someone that has it now.  It changed hands.  Spend some of the value stored on a stored value card and you still have the card, minus the money value spent.  More money value can possibly be added to the card, maybe not if it is "spend only" get a new one when all value is spent.

In the prior blog entry I looked at the US Treasury stored value card systems.  EZPay, EagleCash and Navy Cash.

At this point I will insert something that I ran across while chasing information links related stored value cards.  That something is: Decoupled Debit card and I am still trying to wrap my mind around it.  I may have to come back to explore it more.  This paragraph is a place holder to do that.  From the Wikipedia link that makes a decoupled debit card look more like an old fashion check?????
"A decoupled debit card is a debit card in the US that is not issued by, and not tied to, a particular retail financial institution, such as a bank or credit union. This is based on the ability in the US ACH payment system to make an electronic payment from any bank or credit union without needing to use a card issued by the bank or credit union."

Getting back on track:  What might be the really big thing about Apple Pay????  Could it be related to Stored Value Cards?  Might the simple key to understanding Stored Value Cards be the ability granted by the information age to separate logical conceptual structures and processing from their physical structure and processing relationships of old school systems like paper dollar bills?  Are the US Treasury Stored Value Card systems for the military the ideal test model for a broader Stored Value Card monetary system?

Will Apple Pay on an iPhone device have the ability to replace the Stored Value Card (the actual card the military member uses) as the user interface with the stored value on the device?

That would be BIG!  Writ LARGE!

EZPay is described here at this US Treasury site.  It is "Boot Camp" money for military trainees in all services except the Navy.

EagleCash is described here at this US Treasury site.  It is "Deployed Armed Forces" (and contractors) money used by military members assigned outside the USA. 

Navy Cash / Marine Cash is described here at this US Treasury site.  It is "Shipboard Money" used while deployed on sea duty.

Another way of looking at these Treasury Stored Value Cards for the military is "Captive Audience" money for spending in certain designated places.  Is that a fair assessment?

Then I ran across this in my web meanderings:  Another captive audience with need to spend money in a certain place. Megabanks have prison financial services market locked up.

Locked up under a contract with the US Treasury!

Maybe it relates, maybe it does not.  The possibilities of the model are interesting.  Note that JP Morgan is also involved in the Navy Cash system.  However, also note that there is no charge or fee to military members for the US Treasury Stored Value Card systems.  But.....is this prison system a Stored Money Value system?

Prison Bankers Cash In On Captive Customers  This link mentions JPay a commercial company that is a player in the pre-paid debit card (Stored Value Card) business.  Searching JPay and "Stored Value" does not get any related hits but prepaid debit card does.  It is not clear if the nature of the prepaid debit card is the same as a Stored value card.  Comerica is a bank located in Texas related to the prison banking system.  Wikipedia Comerica link here

At this point I am getting far afield from the subject of this blog entry.  To get back to the point:  There is a great amount of money in the form of Stored Value Cards.  Apple is producing an interface to Stored Value Card money.  Apple might do more than that and enter the Stored Value business now dominated by banks and credit card clearing agencies.