Page "Stored-value card" Paragraph 8

Semi-closed system prepaid cards are similar to closed system prepaid cards.

However, cardholders are permitted to redeem the cards at multiple merchants within a geographic area.

These types of cards are issued by a third party, rather than the retailer who accepts the card.

Examples include university cards and mall gift cards.

The laws governing these types of cards are unsettled.

Depending on the state, the issuer may or may not be required to have a money transmitter license or other similar license.

In addition to the District of Columbia, the states that require a license include Connecticut, Florida, Illinois, Iowa, Louisiana, Maryland, Minnesota, Mississippi, North Carolina, Oregon, Texas, Vermont, Virginia, West Virginia, Washington, and Wyoming.

Note, these states explicitly require licensing for card issuers.

Other states may have more subtle licensing laws.

Under 18 USC section 1960, it is a crime for an issuer to conduct a money transmitting business without a license.