{"id":4422,"date":"2021-10-02T06:44:00","date_gmt":"2021-10-02T06:44:00","guid":{"rendered":"https:\/\/wibmo.com\/what-are-pre-paid-cards-and-how-do-they-work\/"},"modified":"2024-06-04T06:39:05","modified_gmt":"2024-06-04T06:39:05","slug":"what-are-pre-paid-cards-and-how-do-they-work","status":"publish","type":"post","link":"https:\/\/wibmo.com\/blogs\/what-are-pre-paid-cards-and-how-do-they-work\/","title":{"rendered":"What are Pre-Paid Cards and how do they work?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"4422\" class=\"elementor elementor-4422\">\n\t\t\t\t<div class=\"elementor-element elementor-element-6e587447 e-flex e-con-boxed wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no e-con e-parent\" data-id=\"6e587447\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-409476a6 elementor-widget elementor-widget-text-editor\" data-id=\"409476a6\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p id=\"af76\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">By referring to Prepaid Cards, we first need to agree on what do we understand by Prepaid Card, and how do we see it? Do we see it as a closed card program or an open card program?<\/p>\n<p id=\"3d9e\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">Many get confused in the definition of what exactly is a Prepaid card?<\/p>\n<p id=\"c862\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">A Prepaid Card can be defined as a secured card (a plastic) that enables users to process transactions in order to make purchases of goods and\/or services. We can then say that we do have two types of Prepaid Cards:<\/p>\n\n<ul class=\"\">\n \t<li id=\"478a\" class=\"wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe agn aga agb bj\" data-selectable-paragraph=\"\">Closed Card Programs.<\/li>\n \t<li id=\"0c97\" class=\"wh wi sr wj b wk agc wm wn wo agd wq wr ws age wu wv ww agf wy wz xa agg xc xd xe agn aga agb bj\" data-selectable-paragraph=\"\">Open Card Programs.<\/li>\n<\/ul>\n<p id=\"a4d9\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">A<strong class=\"wj lv\"><em class=\"aho\">\u00a0Closed Card Program<\/em><\/strong>\u00a0is usually referred to as a closed-loop, mostly in the form of Gift Cards, used by many stores. On the other hand, an\u00a0<strong class=\"wj lv\"><em class=\"aho\">Open Card Program<\/em><\/strong>\u00a0is usually referred to as a debit card, which is linked to a bank account. Both solutions could be referred to as Prepaid Card solutions; however, one does not require the need of having a bank account but for the other, having a bank account is a must. To some extent, some countries around the world are now initiating closed-loop programs, as a debit card, for domestic card transactions. For instance, a country may opt to have a closed-loop domestic card program that can only be utilized in the country, in form of a domestic prepaid card scheme.<\/p>\n<p id=\"df22\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">In today\u2019s world, Financial Institutions (FI) are working hard to promoting Financial Inclusion by providing financial services and\/or products to customers at a very affordable cost. However, despite, the efforts and times put together by Financial Institutions, the results for getting everyone inclusive into the Financial Ecosystem is still low. Therefore, FI is constantly improving their products\/solutions in order to meet customers satisfaction by positioning solutions such as Prepaid Cards in order to make inclusion attractive.<\/p>\n<p id=\"06f2\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">That is why, to meet customer\u2019s satisfaction, Financial Institutions have opened up to the closed\/open loop payment program to reach out to all markets and\/or segments. These programs have been put in place to solving problems for Consumers, Retailers, Corporates, and Governments.<\/p>\n<p id=\"d51b\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">The benefit of those cards is that consumers can make use of the solution to make a purchase, pay bills, transfer funds, and\/or withdraw cash from an ATM, Merchant\/Retailer stores, or an Agent (Agency Banking), in a very convenient and secure way.<\/p>\n<p id=\"6400\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">Prepaid Cards used by the bank (\u201cthe debit card\u201d), can also be offered to customers who do not qualify for credit facilities. By these means, the bank is offering a product to customers which will enable them to transact by using their own funds. On the other hand, Retailers or Merchants are also offering similar solutions to customers in form of Gift Cards, for instance, as previously mentioned.<\/p>\n<p id=\"8616\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">Once a Prepaid Card has been offered to a customer, the Service Provider will immediately issue a card to the customer in order to enable the customer to start transacting from day one. Nevertheless, to make this mechanism fully functional:<\/p>\n\n<ol class=\"\">\n \t<li id=\"3b8e\" class=\"wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe afz aga agb bj\" data-selectable-paragraph=\"\">A plastic card will have to be issued to the customer.<\/li>\n \t<li id=\"576b\" class=\"wh wi sr wj b wk agc wm wn wo agd wq wr ws age wu wv ww agf wy wz xa agg xc xd xe afz aga agb bj\" data-selectable-paragraph=\"\">Customer will have to load own funds onto the cards.<\/li>\n \t<li id=\"913e\" class=\"wh wi sr wj b wk agc wm wn wo agd wq wr ws age wu wv ww agf wy wz xa agg xc xd xe afz aga agb bj\" data-selectable-paragraph=\"\">The card will have an Expiring Date, Card Number, and a PIN.<\/li>\n \t<li id=\"94be\" class=\"wh wi sr wj b wk agc wm wn wo agd wq wr ws age wu wv ww agf wy wz xa agg xc xd xe afz aga agb bj\" data-selectable-paragraph=\"\">Customers can now start transacting.<\/li>\n<\/ol>\n<p id=\"9fe7\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">Yet, for Prepaid Card such as Gift Cards, cards can only be used within a network of retailers, and most of the time, the card does not have a PIN number for acceptance of transactions. However, transactions are authorized on a signature basis.<\/p>\n<p id=\"a829\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\">So, Prepaid cards could be considered as a fast-growing segment for Retail Banking and Merchant Services Industry despite entries of new innovative payment technologies.<\/p>\n<p id=\"6517\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\"><strong class=\"wj lv\">Author:<\/strong><\/p>\n<p id=\"dc03\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\"><a class=\"af xf\" href=\"https:\/\/www.linkedin.com\/in\/nsele-p-b-003a54177\/\" target=\"_blank\" rel=\"noopener ugc nofollow\">Nsele P. Bokuma<\/a>, Director-Sales, South Africa<\/p>\n<p id=\"b5e4\" class=\"pw-post-body-paragraph wh wi sr wj b wk wl wm wn wo wp wq wr ws wt wu wv ww wx wy wz xa xb xc xd xe fv bj\" data-selectable-paragraph=\"\"><a class=\"af xf\" href=\"https:\/\/www.wibmo.com\/\" target=\"_blank\" rel=\"noopener ugc nofollow\">Wibmo<\/a>\u00a0A PayU\/Naspers FinTech Company<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-d641b71 e-flex e-con-boxed wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no e-con e-parent\" data-id=\"d641b71\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a0da276 wpr-post-info-align-center elementor-widget elementor-widget-wpr-post-info\" data-id=\"a0da276\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"wpr-post-info.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<ul class=\"wpr-post-info wpr-post-info-vertical\"><li class=\"wpr-post-info-taxonomy\"><a href=\"https:\/\/wibmo.com\/blogs\/tag\/card-payment-2\/\"><span class=\"wpr-post-info-text\"><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-tag\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M0 252.118V48C0 21.49 21.49 0 48 0h204.118a48 48 0 0 1 33.941 14.059l211.882 211.882c18.745 18.745 18.745 49.137 0 67.882L293.823 497.941c-18.745 18.745-49.137 18.745-67.882 0L14.059 286.059A48 48 0 0 1 0 252.118zM112 64c-26.51 0-48 21.49-48 48s21.49 48 48 48 48-21.49 48-48-21.49-48-48-48z\"><\/path><\/svg><\/span>Card Payment<span class=\"tax-sep\">, <\/span><\/a><a href=\"https:\/\/wibmo.com\/blogs\/tag\/digital-payment-2\/\"><span class=\"wpr-post-info-text\"><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-tag\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M0 252.118V48C0 21.49 21.49 0 48 0h204.118a48 48 0 0 1 33.941 14.059l211.882 211.882c18.745 18.745 18.745 49.137 0 67.882L293.823 497.941c-18.745 18.745-49.137 18.745-67.882 0L14.059 286.059A48 48 0 0 1 0 252.118zM112 64c-26.51 0-48 21.49-48 48s21.49 48 48 48 48-21.49 48-48-21.49-48-48-48z\"><\/path><\/svg><\/span>Digital Payment<span class=\"tax-sep\">, <\/span><\/a><a href=\"https:\/\/wibmo.com\/blogs\/tag\/online-payments-2\/\"><span class=\"wpr-post-info-text\"><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-tag\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M0 252.118V48C0 21.49 21.49 0 48 0h204.118a48 48 0 0 1 33.941 14.059l211.882 211.882c18.745 18.745 18.745 49.137 0 67.882L293.823 497.941c-18.745 18.745-49.137 18.745-67.882 0L14.059 286.059A48 48 0 0 1 0 252.118zM112 64c-26.51 0-48 21.49-48 48s21.49 48 48 48 48-21.49 48-48-21.49-48-48-48z\"><\/path><\/svg><\/span>Online Payments<span class=\"tax-sep\">, <\/span><\/a><a href=\"https:\/\/wibmo.com\/blogs\/tag\/prepaid-card-2\/\"><span class=\"wpr-post-info-text\"><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-tag\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M0 252.118V48C0 21.49 21.49 0 48 0h204.118a48 48 0 0 1 33.941 14.059l211.882 211.882c18.745 18.745 18.745 49.137 0 67.882L293.823 497.941c-18.745 18.745-49.137 18.745-67.882 0L14.059 286.059A48 48 0 0 1 0 252.118zM112 64c-26.51 0-48 21.49-48 48s21.49 48 48 48 48-21.49 48-48-21.49-48-48-48z\"><\/path><\/svg><\/span>Prepaid Card<\/a><\/li><\/ul>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>By referring to Prepaid Cards, we first need to agree on what do we understand by Prepaid Card, and how do we see it? Do we see it as a closed card program or an open card program? Many get confused in the definition of what exactly is a Prepaid card? A Prepaid Card can be defined as a secured card (a plastic) that enables users to process transactions in order to make purchases of goods and\/or services. We can then say that we do have two types of Prepaid Cards: Closed Card Programs. Open Card Programs. A\u00a0Closed Card Program\u00a0is usually referred to as a closed-loop, mostly in the form of Gift Cards, used by many stores. On the other hand, an\u00a0Open Card Program\u00a0is usually referred to as a debit card, which is linked to a bank account. Both solutions could be referred to as Prepaid Card solutions; however, one does not require the need of having a bank account but for the other, having a bank account is a must. To some extent, some countries around the world are now initiating closed-loop programs, as a debit card, for domestic card transactions. For instance, a country may opt to have a closed-loop domestic card program that can only be utilized in the country, in form of a domestic prepaid card scheme. In today\u2019s world, Financial Institutions (FI) are working hard to promoting Financial Inclusion by providing financial services and\/or products to customers at a very affordable cost. However, despite, the efforts and times put together by Financial Institutions, the results for getting everyone inclusive into the Financial Ecosystem is still low. Therefore, FI is constantly improving their products\/solutions in order to meet customers satisfaction by positioning solutions such as Prepaid Cards in order to make inclusion attractive. That is why, to meet customer\u2019s satisfaction, Financial Institutions have opened up to the closed\/open loop payment program to reach out to all markets and\/or segments. These programs have been put in place to solving problems for Consumers, Retailers, Corporates, and Governments. The benefit of those cards is that consumers can make use of the solution to make a purchase, pay bills, transfer funds, and\/or withdraw cash from an ATM, Merchant\/Retailer stores, or an Agent (Agency Banking), in a very convenient and secure way. Prepaid Cards used by the bank (\u201cthe debit card\u201d), can also be offered to customers who do not qualify for credit facilities. By these means, the bank is offering a product to customers which will enable them to transact by using their own funds. On the other hand, Retailers or Merchants are also offering similar solutions to customers in form of Gift Cards, for instance, as previously mentioned. Once a Prepaid Card has been offered to a customer, the Service Provider will immediately issue a card to the customer in order to enable the customer to start transacting from day one. Nevertheless, to make this mechanism fully functional: A plastic card will have to be issued to the customer. Customer will have to load own funds onto the cards. The card will have an Expiring Date, Card Number, and a PIN. Customers can now start transacting. Yet, for Prepaid Card such as Gift Cards, cards can only be used within a network of retailers, and most of the time, the card does not have a PIN number for acceptance of transactions. However, transactions are authorized on a signature basis. So, Prepaid cards could be considered as a fast-growing segment for Retail Banking and Merchant Services Industry despite entries of new innovative payment technologies. Author: Nsele P. Bokuma, Director-Sales, South Africa Wibmo\u00a0A PayU\/Naspers FinTech Company Card Payment, Digital Payment, Online Payments, Prepaid Card<\/p>\n","protected":false},"author":6,"featured_media":4438,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[116,88,117,161],"class_list":["post-4422","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-insights","tag-card-payment-2","tag-digital-payment-2","tag-online-payments-2","tag-prepaid-card-2"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What are Pre-Paid Cards and how do they work? - Digital Payments, Payment Security and Lending - Wibmo<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wibmo.com\/blogs\/what-are-pre-paid-cards-and-how-do-they-work\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What are Pre-Paid Cards and how do they work? - Digital Payments, Payment Security and Lending - Wibmo\" \/>\n<meta property=\"og:description\" content=\"By referring to Prepaid Cards, we first need to agree on what do we understand by Prepaid Card, and how do we see it? Do we see it as a closed card program or an open card program? Many get confused in the definition of what exactly is a Prepaid card? A Prepaid Card can be defined as a secured card (a plastic) that enables users to process transactions in order to make purchases of goods and\/or services. We can then say that we do have two types of Prepaid Cards: Closed Card Programs. Open Card Programs. A\u00a0Closed Card Program\u00a0is usually referred to as a closed-loop, mostly in the form of Gift Cards, used by many stores. On the other hand, an\u00a0Open Card Program\u00a0is usually referred to as a debit card, which is linked to a bank account. Both solutions could be referred to as Prepaid Card solutions; however, one does not require the need of having a bank account but for the other, having a bank account is a must. To some extent, some countries around the world are now initiating closed-loop programs, as a debit card, for domestic card transactions. For instance, a country may opt to have a closed-loop domestic card program that can only be utilized in the country, in form of a domestic prepaid card scheme. In today\u2019s world, Financial Institutions (FI) are working hard to promoting Financial Inclusion by providing financial services and\/or products to customers at a very affordable cost. However, despite, the efforts and times put together by Financial Institutions, the results for getting everyone inclusive into the Financial Ecosystem is still low. Therefore, FI is constantly improving their products\/solutions in order to meet customers satisfaction by positioning solutions such as Prepaid Cards in order to make inclusion attractive. That is why, to meet customer\u2019s satisfaction, Financial Institutions have opened up to the closed\/open loop payment program to reach out to all markets and\/or segments. These programs have been put in place to solving problems for Consumers, Retailers, Corporates, and Governments. The benefit of those cards is that consumers can make use of the solution to make a purchase, pay bills, transfer funds, and\/or withdraw cash from an ATM, Merchant\/Retailer stores, or an Agent (Agency Banking), in a very convenient and secure way. Prepaid Cards used by the bank (\u201cthe debit card\u201d), can also be offered to customers who do not qualify for credit facilities. By these means, the bank is offering a product to customers which will enable them to transact by using their own funds. On the other hand, Retailers or Merchants are also offering similar solutions to customers in form of Gift Cards, for instance, as previously mentioned. Once a Prepaid Card has been offered to a customer, the Service Provider will immediately issue a card to the customer in order to enable the customer to start transacting from day one. Nevertheless, to make this mechanism fully functional: A plastic card will have to be issued to the customer. Customer will have to load own funds onto the cards. The card will have an Expiring Date, Card Number, and a PIN. Customers can now start transacting. Yet, for Prepaid Card such as Gift Cards, cards can only be used within a network of retailers, and most of the time, the card does not have a PIN number for acceptance of transactions. However, transactions are authorized on a signature basis. So, Prepaid cards could be considered as a fast-growing segment for Retail Banking and Merchant Services Industry despite entries of new innovative payment technologies. Author: Nsele P. Bokuma, Director-Sales, South Africa Wibmo\u00a0A PayU\/Naspers FinTech Company Card Payment, Digital Payment, Online Payments, Prepaid Card\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wibmo.com\/blogs\/what-are-pre-paid-cards-and-how-do-they-work\/\" \/>\n<meta property=\"og:site_name\" content=\"Digital Payments, Payment Security and Lending - Wibmo\" \/>\n<meta property=\"article:published_time\" content=\"2021-10-02T06:44:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-06-04T06:39:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/wibmo.com\/blogs\/wp-content\/uploads\/2024\/05\/Prepaid-cards.webp\" \/>\n\t<meta property=\"og:image:width\" content=\"1400\" \/>\n\t<meta property=\"og:image:height\" content=\"528\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/webp\" \/>\n<meta name=\"author\" content=\"Nsele P. Bokuma\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Nsele P. Bokuma\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/wibmo.com\\\/blogs\\\/what-are-pre-paid-cards-and-how-do-they-work\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/wibmo.com\\\/blogs\\\/what-are-pre-paid-cards-and-how-do-they-work\\\/\"},\"author\":{\"name\":\"Nsele P. 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A Prepaid Card can be defined as a secured card (a plastic) that enables users to process transactions in order to make purchases of goods and\/or services. We can then say that we do have two types of Prepaid Cards: Closed Card Programs. Open Card Programs. A\u00a0Closed Card Program\u00a0is usually referred to as a closed-loop, mostly in the form of Gift Cards, used by many stores. On the other hand, an\u00a0Open Card Program\u00a0is usually referred to as a debit card, which is linked to a bank account. Both solutions could be referred to as Prepaid Card solutions; however, one does not require the need of having a bank account but for the other, having a bank account is a must. To some extent, some countries around the world are now initiating closed-loop programs, as a debit card, for domestic card transactions. For instance, a country may opt to have a closed-loop domestic card program that can only be utilized in the country, in form of a domestic prepaid card scheme. In today\u2019s world, Financial Institutions (FI) are working hard to promoting Financial Inclusion by providing financial services and\/or products to customers at a very affordable cost. However, despite, the efforts and times put together by Financial Institutions, the results for getting everyone inclusive into the Financial Ecosystem is still low. Therefore, FI is constantly improving their products\/solutions in order to meet customers satisfaction by positioning solutions such as Prepaid Cards in order to make inclusion attractive. That is why, to meet customer\u2019s satisfaction, Financial Institutions have opened up to the closed\/open loop payment program to reach out to all markets and\/or segments. These programs have been put in place to solving problems for Consumers, Retailers, Corporates, and Governments. The benefit of those cards is that consumers can make use of the solution to make a purchase, pay bills, transfer funds, and\/or withdraw cash from an ATM, Merchant\/Retailer stores, or an Agent (Agency Banking), in a very convenient and secure way. Prepaid Cards used by the bank (\u201cthe debit card\u201d), can also be offered to customers who do not qualify for credit facilities. By these means, the bank is offering a product to customers which will enable them to transact by using their own funds. On the other hand, Retailers or Merchants are also offering similar solutions to customers in form of Gift Cards, for instance, as previously mentioned. Once a Prepaid Card has been offered to a customer, the Service Provider will immediately issue a card to the customer in order to enable the customer to start transacting from day one. Nevertheless, to make this mechanism fully functional: A plastic card will have to be issued to the customer. Customer will have to load own funds onto the cards. The card will have an Expiring Date, Card Number, and a PIN. Customers can now start transacting. Yet, for Prepaid Card such as Gift Cards, cards can only be used within a network of retailers, and most of the time, the card does not have a PIN number for acceptance of transactions. However, transactions are authorized on a signature basis. So, Prepaid cards could be considered as a fast-growing segment for Retail Banking and Merchant Services Industry despite entries of new innovative payment technologies. Author: Nsele P. 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