Abstract
The cash card market has grown fast recently in Taiwan. As this market continues to expand, the cash card issuing institution has to broaden funding source via the securitization of cash card receivables to increase the liquidity. However, the practical experience of securitization is rare and the securitization literature is small in Taiwan. Accordingly, the purpose of this research is to initially discuss the history and the characteristics of cash card. Moreover, a comparison is made between cash card and credit card. Furthermore, similar to the structure of credit card receivables, the valuation framework of cash card securities is conducted together with its own unique factors and the suitable interest rate model. More importantly, a sensitivity analysis is conducted to investigate the price changes of cash card securities when the market conditions and simulation parameters are allowed to vary. Within this study, the optimal pricing structure of the cash card security could be evidenced. In addition to the valuation materials, this study further discuss the legal issues, credit enhancement, rating standard, and servicing which are needed in the process of securitization. Through this process, it is believed that the market for cash card securities will be quite promising in Taiwan.