A prepaid debit card allows users to deposit funds on the account linked to the card before making a purchase. Such cards are often used for specific cases, such as travelers cards, gift cards, and youth cards. A prepaid card is popular since it is more flexible and can be reloaded daily.
Prepaid cards can either be one time or reloadable. A prepaid card, also referred to as a "stored value card", has a monetary balance associated with the prepaid card already funded by deposit into the card's corresponding account.
Essentially, a prepaid card acts as a bank account lite type since funds are deposited or loaded into the card account before the card can be used to make transactions. Merchants should understand that a prepaid card can either be reloadable (used more than once) or non-reloadable (used once).
A reloadable prepaid card is almost similar to a debit card. To use this card for a purchase, the cardholder's identity is verified and associated with the account. A reloadable prepaid card can be deposited with more funds until its expiration date. Reloadable cards display major credit card company logos. Unlike non-reloadable cards, the prepaid reloadable are subject to identity verification. In fact, the cards are personalized with the owner's name.
A prepaid non-reloadable card has a fixed value amount that can be used until it reaches a nil balance. The card requires less customer identification while transacting. In fact, users can purchase and use the card directly off the rack without linking their identities with the card. Some merchants send out non-reloadable cards as part of rebates and offers. When the balance reaches zero, the non-reloadable cannot be used. The Federal Deposit Insurance Corporation does not insure non-reloadable cards. Therefore, the funds on the card may not be covered in the event of the issuing bank's failure.
Prepaid Card Limitations
Since non-reloadable cards require little cardholder verification, the prepaid card has some limitations. For instance, they cannot be used where fund authorization is mandatory. For instance, merchants that require security deposits, such as hotels, may not accept non-reloadable cards because of fund limitations in case of a dispute.
The purchaser pays the fee associated with non-reloadable and reloadable cards. The fees variy depending on the card type, which makes it vital for merchants to detect the card. The fee is paid in addition to the amount loaded onto a card. The card issuer determines the maximum value for the prepaid cards. Moreover, some cards have a daily reload limit. Both non-reloadable and reloadable cards have a monthly usage fee. However, some issues waive the fee if a purchaser makes a certain number of purchases or reloads each month.
BinBase.com Can Helpin Prepaid Reloadable and Non-Reloadable Detection
Like all payment cards, prepaid reloadable and non-reloadable can be used to purchase commodities and services in person, online, or through any standard payment type. However, merchants should devise a way to detect and distinguish between reloadable and non-reloadable cards due to their limitations. This way, retailers that require fund authorization and security deposits will not accept a non-reloadable prepaid card for transactions.
BinBase.com can help merchants overcome this challenge by automatically detecting the type of card used by a customer. They offer a well-designed BIN system that allows our clients to link their customers to their purchases and approve electronic transactions instantaneously without risks related to card fraud, which has been on the rise. The BIN check service increases the accuracy and efficiency of your business transaction.
For example, the format below can be used by our clients to distinguish if a card is prepaid non-reloadable or reloadable. A merchant can use the 5 parameter in the record to identify the type of a card.
510466;MASTERCARD;METABANK;DEBIT;PREPAID RELOADABLE;UNITED STATES;US;USA;840;HTTPS://WWW.METABANK.COM/;1.866.550.6382
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