Prepaid bank card

prepaid bank card is a means of payment that derives from the debit card. The fundamental difference is the lack of connection with the bank account of the bearer’s bank.

Without bank account and without commitment, the prepaid bank card allows:

  • pay for purchases in stores and on the internet like a conventional credit card 1 .
  • the withdrawal of cash in an ATM.

Normal operation is limited to the use of funds loaded in advance. However, in the case of currency conversion transactions, the actual amount spent may be unknown.

History

Cell phone

The prepaid bank card has its origin in the mobile phone. Technology has enabled mobile phones to be used to acquire goods and services. It was therefore necessary for Europe to adopt clear and applicable rules in the 25 Member States. By introducing a supra national value directive, the European Commission wants to encourage investment in the communications sector and the development of services.

E-money

The electronic money is defined in Directive (2000/46 / CU) as a monetary value stored on a chip card (pre-paid card or ‘ electronic purse ‘) and which is accepted as means of payment by undertakings other than the ‘transmitter. Under the Directive, electronic money must be exchanged for cash of equal value and electronic money issuers are required to implement money-laundering safeguards .

Prepaid calling cards

Under the Directive at national level, the authorities of some Member States have decided that in certain circumstances, by providing prepaid phone cards, mobile phone operators must also comply with the Directive’s rules.

MasterCard and Visa have thus been able to open their networks to independent operators licensed to issue electronic money, outside the banking circuit, for the sale and distribution of prepaid bank cards 2 .

Operation

Appellations

Prepaid cards are commonly referred to as prepaid cards, bank cards or prepaid credit cards, but they work more like debit cards than credit cards. Credit cards offer lines of credit to cardholders, whereas a prepaid card only uses the money available on the card.

Bank account alternative

Rechargeable prepaid cards are an alternative for those who do not have a bank account and therefore those who do not have the opportunity to obtain a credit card or those who do not wish to shop on the internet with a credit card. credit linked to their bank account.

Basic Usage

The (re) loading of the bank card is done on the internet or in a dedicated shop. The prepaid bank card working only for the funds recharged, when the funds are exhausted, it is necessary to reload the card to continue to use it.

Most cards have online access.

Customers of the rechargeable bank card

Target

Visa and MasterCard plan to win over new customers, especially those who use check cashing services or those who are prohibited from banking. But the customer of the rechargeable bank card also includes all those who wish to leave the spiral of credit or who have trouble controlling their expenses.

The prepaid bank card can be bought by everyone, even by the youngest under 16 years old [ref. necessary] . Indeed, there is never an overdraft or overdraft that generates agios. A prepaid card allows control over your budget while offering the convenience and benefits of a debit card.

Advantages of the rechargeable bank card

Designed to replace species

When traveling, no need to carry cash, sums are on the card. In most cases, if a card is lost or stolen, the credit balance will be transferred through a new account, and the cardholder will receive a replacement card. A prepaid card issuer offers a guarantee in case of loss or theft, so that the holder benefits from the same advantages as the holder of a credit card. .

Very extensive use

Prepaid cards are widely accepted at merchants and on the internet.

Fees

Acquisition costs

A prepaid bank card costs between 10 and 40 euros depending on the integrated models and options, including options for personalizing the name and first name on the card.

Usage costs

Each card offers different costs, including:

  • reloading fees;
  • expenses on expenses;
  • monthly fees;
  • the costs for inactivity;
  • exchange costs;
  • PIN code change ;
  • transfer fees to a third party account.

Prepaid credit cards are not credit cards, they can make reservations for hotel rooms, petrol stations or rent a car, but the balance must be sufficient to cover pre-authorization requests. For example, for a fuel tank of 50 euros , the automatic petrol stations ask a pre-authorization which, according to the station, can go up to double. It will therefore have 100 euros of credit on his card.

Some payment services by monthly payment do not accept prepaid bank cards due to a risk of non-payment too high. Some sites 3 offers a comparison of rechargeable cards.

The ceiling of prepaid bank cards

The recent demand for prepaid bank cards in Europe is largely due to the possibility of using them anonymously. But this anonymity is only effective up to 1,000 euros of reloading. Above it must send a copy of an ID and proof of address.

Notes and references

  1. ↑ Text indebtedness  [ archive ]
  2. ↑ Source http://ec.europa.eu/internal_market/bank/e-money/index_en.htm  [ archive ]
  3. ↑ “Comparison of rechargeable cards”  [ archive ]

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