Got Questions?
Here is our FAQs section to help you to better understand all about our product.
A prepaid card is a form of plastic money that works on the stored-value model. It doesn’t require any third-party financial institutions to process transactions. Customers can quickly pay their expenses using a prepaid card without network availability. It contains a specific sum of money that the customer recharges with. There is a cap on the total value, which can be stored on a prepaid card. It can vary based on the needs and preferences of a customer and the policies of the card issuer. It makes transactions seamless and efficient.
Prepaid cards are different from debit or credit cards. Both debit and credit cards are issued by a financial institution, and whenever a transaction is processed, it requires third-party intervention. Therefore, it is mandatory to have network access to use credit or debit cards. Furthermore, credit cards come with a prespecified limit that the card issuer sets after evaluating the customer’s credit profile and history. However, a Prepaid Card doesn’t require credit profile evaluation. Instead, the balance available is set by the customer based on the amount they have recharged it with. On the other hand, debit cards do have some similarities with prepaid cards, but there is a significant difference. Unlike a debit card, no bank account is required to use a Prepaid Card.
There’s a lot that can be done with a prepaid card when it comes to financial transactions. Whatever you can do using cash can be done using a Prepaid Card. It can also act as a replacement for traditional debit or credit cards to a great extent. Shopping online, utility bill payments, purchasing groceries, booking air tickets, paying at a restaurant, and much more can be done using prepaid cards. However, the extent of possibilities depends on the acceptability and the type of Prepaid Card you are using for transactions.
No, you don’t necessarily need to open a new bank account to use prepaid cards. Most Prepaid Cards don’t require any financial intermediary to process transactions. Therefore, opening a bank account with a respective financial institution is unnecessary. Using a Prepaid Card is just like carrying cash but in a highly secure way. You don’t have to go through the hassles of opening a new bank account to make payments using the same.
The answer to this question is highly subjective. It depends on the policies of your card issuer and the type of prepaid card you are carrying. For example, most Prepaid Cards issued by financial institutions allow users to withdraw cash at ATMs. Usually, open-looped Prepaid Cards allow users to withdraw money from ATMs. Currently, cash withdrawal is permitted for full-KYC compliant PPIs (Prepaid Payment Instruments).