A card that has been preloaded with a certain amount of money and has a certain credit is called a prepaid card. The most common form of prepaid cards is the gift vouchers issued by retail stores. This type of card enables individuals to pay for purchases by adding funds to their card in advance of transacting a purchase; however there is no option for an overdraft.
Using prepaid cards as a payment solution
Retailers who offer their clients the opportunity to pay for goods and services through prepaid cards are able to benefit from a number of advantages. The foremost benefit of prepaid cards is that they are a simple yet efficient method of payment thus attracting many customers.
A growing number of retail outlets offer prepaid cards by branding them as gift voucher cards. The way this works is a customer will purchase the card of a certain value and then the card can be used as a form of payment within that store. Some prepaid cards that are gift voucher cards can be used in multiple stores. A prepaid card is a benefit for retailers, as it is a popular choice for many customers who are seeking to buy a present but do not know what to buy. The beneficiary of the gift card has to use the card in that shop.
Companies purchase prepaid cards on a regular basis and give the prepaid cards to individuals or companies they owe money to. The prepaid cards used by companies have a certain sum of money on the card and this will typically be the same sum of money that the company owes to the other. The beneficiary of the prepaid card will effectively have an account by which they can spend up to the value of the card.