Prepaid Cards vs. Other Payment Cards
Despite the fact that prepaid cards are getting quite widespread nowadays, many users have not yet had the chance to assess their merits and understand the benefits and opportunities they provide. While being practically similar in use to debit or credit payment cards, they offer a number of attractive features, thus standing out among other banking products. What's the difference?
It should be noticed from the outset that we are referring here to bank-issued cards within international payment network (Visa, Mastercard, and others) which are universal payment instruments and used in similar ways as regular ones. We will not review variants issued by other organizations (eg. retail chains) and being non-universal.
So, let's get down to the matter.
What is “a prepaid card”?
Let's begin by focusing on definitions.
A debit card is a bankcard used to make purchases of goods and services and to withdraw cash money that its holder disposes on his personal account to which such a card is tied. Let us say that this is sort of a key to its holder's funds on his bank account.
A credit card is designed to perform the same operations as a debit one, but is financed through its issuing bank's funds and within its credit line's limits. Hence, this is a form of a non-cash credit to natural persons.
A prepaid or stored-value card is a bankcard intended to carry out the same operations as the above-mentioned instruments, but is financed through the funds that the issuing bank receive beforehand on its consolidated account.
What's the difference between prepaid cards and other types?
So, what's the difference?
As we see from the definitions above, credit and debit cards are issued to be always tied to a specific banking account belonging to a natural person or a company. Therefore, it is always quite easy to identify the real money's owner making a payment.
When issuing a prepaid card, the bank do not open a personalized account for its client, so there is no owner's personal information at the moment of the issue nor when it is acquired. And furthermore, the person holding the card is only allowed to use it within the limits of its nominal value or the total amount of funds deposited beforehand. Owing to the lack of a checking account and a binding to a specific identity, anyone, who possesses the card, may use it. All that makes prepaid bank cards different from analogous instruments, where only legitimate owners, who ordered the card's issue and servicing, are permitted to operate them.
Types of prepaid bank cards
Actually, given that there is quite a wide variety of stored-value cards on the market, in this article we will consider the most important ones.
Following the possibility of replenishment, we encounter reloadable and non-reloadable prepaid cards.
The non-reloadable form is limited to a certain amount of money that is the card's nominal value and may be instantly purchased, because at the time of the purchase they are already issued and tied to a specific sum of money on the bank account. In many countries including the US and Canada, prepaid cards are sold in stores as gift cards and customers can buy them without producing their IDs, what makes their utilization absolutely impersonal.
The reloadable prepaid cards are tied to an account though generally anonymized. They are zero-balance and their holder is permitted to reload the account on his own any time. However, in spite of the fact that reloadable cards are not tied to an account, they themselves are not impersonal, since their purchase calls for identity checking.
By type of physical characteristics, there are plastic and virtual prepaid cards that look like regular credit or debit bank cards but without the name of the holder on them. Gift cards are the most common version of plastic non-reloadable prepaid cards, but you can not purchase them anonymously on-line.
The main difference of virtual prepaid cards from plastic ones is that the former do not exist physically and there are only some data, which is used while paying online. All web-based systems recognize them as usual debit forms. Yet, there we encounter a problem, because it is practically impossible to buy such cards remotely and anonymously. As a general rule, to acquire a virtual prepaid card, the person must be the resident of the country where this is sold, confirm his identity and have a physical address (a postal box) to which data will be sent via regular mail delivery.
Ezzocard is a virtual prepaid non-reloadable bankcard and today this is nearly the only financial instrument which can be obtained remotely and anonymously on-line.
Specific aspects of prepaid cards
In fact, prepaid cards possess some features arising from their basic characteristics.
- They need to be activated.
Since a user or an intermediary receives the card later than its issue day, the cards are stored in non-operating status and cannot be neither registered nor utilized. As a rule, they are activated at retail places by the seller directly when he hands them over to the owner, or the card holder make the activation himself by calling the respective bank service. Ezzocard prepaid cards are sold already activated.
- They are to be registered.
When paying by any bankcard, a verification of the name and the address takes place that is why every prepaid card must be registered. Since there is an AVS (Address Verification System) check, the holder's billing address must be existing in reality. At the same time, non-reloadable prepaid cards can be registered in any name including aliases, whereas occasional restrictions on the billing address of some of them occur, geographically they can be registered only in a particular country.
U.S. Dollars-denominated Ezzocard virtual cards can be registered in any mailing address while Ezzocard cards in Canadian dollars (CAD) require the one in Canada.
- They have value and expiration date limitations.
Stored-value cards are subject to far more severe limitations on their expiration date than regular debit and credit versions. In most cases the period of their validity does not exceed 1 year. But even if such a card is valid for a longer period of time, it is charged bank processing fees after 1 year of use.
If you hold a non-reloadable prepaid card, your amout of money is limited to its nominal value and no possibility of increasing the sum for even 1 cent exist. This should be kept in mind when buying your card and a higher nominal value's option is preferable.
Prepaid cards' benefits
Generally, utilizing stored-value cards to make transactions is as easy as when you deal with classic products. Besides, despite some drawbacks such as value and expiration date limitations, they offer quite a number of benefits to their owners, eg:
- They may be used anonymously. The cards accept a registration in an assumed name or an alias and therefore its holder may keep some of his payments in secret.
- They provide an opportunity of assumed name accounts' verification. Prepaid cards allow the holders to get their accounts in many payment systems (PayPal, Google Adwords, iOffer, etc.) verified for any name in which the card is registered.
- There are no processing fees during the first year of use.
- hey can be purchased immediately. In the United States and Canada you can buy gift cards directly in a store. Nonetheless, if you need to acquire a stored-value card online, you have the opportunity to purchase virtual Ezzocard cards with an immediate delivery right after you have paid for it.
- They may be given to other persons.
Prepaid cards seem to be an optimal and sometimes even the only solution for you, especially when you need to get a payment card fast or you want to stay secret with some of your financial settlements.
We offer you the opportunity to purchase virtual prepaid bank cards in a fully anonymous way and with their instant delivering as soon as your payment transaction is accepted. If you have any follow-up questions concerning cards' purchase, you are welcome to get in touch with our support crew via the widget below the screen or by e-mail.