Deposit guarantees do not cover pre-paid cards

Treasury this week confirmed that balances held on pre-paid cards, like balances held on traveller's cheques, are not covered by the Australian government guarantee on deposits.

That even applies to pre-paid cards issued by a bank or ADI. A spokeswoman for ANZ confirmed that the bank had sought advice from the Commonwealth Treasury on the issue after an enquiry from The Sheet.

ANZ has pared back its online marketing of pre-paid cards and seems to have given up on the universal pre-paid Visa card almost entirely.

"ANZ expects pre-paid cards to remain an attractive product for specific market segments," said a spokesperson on Tuesday.

Those market segments include co-branded gift cards and reward/loyalty schemes, a market dominated by Retail Decisions, which bought Michelle Deaker's E Com Industries in 2005.

Westpac has a pre-paid MasterCard that it sells as a gift-card product in its branches but has never issued a reloadable pre-paid card.