Prepaid is a term used in many industries to describe a wide range of products and services including prepaid vouchers, prepaid airtime for mobile phones and prepaid payment cards. CorporatePay delivers prepaid payment card services.
There are many different types of prepaid cards. Prepaid cards are broadly divided into 2 categories: Open and Closed Loop. Closed loop cards have a “walled garden” of acceptance such as the retail stores of a specific retailer. Open loop typically refers to cards which are accepted at multiple merchants and typically operate under an international card scheme brand (such as MasterCard, Visa, and Amex) or a domestic debit card or an ATM brand. Open loop prepaid cards operate in a very similar manner to debit cards with far greater functionality, flexibility and control.
The prepaid card sector is one of the fastest growing segments of the payment card industry. Market research, particularly the estimates and measurement of the market size, of the prepaid card market does vary but the consensus is clear that the market for prepaid products is large, diverse and growing rapidly.
Prepaid cards differ from other payment cards (credit, charge, and debit) in that the funds are paid into the card account prior to the purchase of goods and services with the card.
The principles of prepaid cards are very similar to those for prepay mobile phones which have been incredibly successful with in excess of 60% of the UK mobile users using prepay.