GLOSSARY

Prepaid card

What is a prepaid card?

A prepaid card is a payment card that is preloaded with a specific amount of money by the user or a third party. Unlike a debit or credit card, it is not directly linked to a bank account or a line of credit. Instead, users can only spend the amount of money that has been preloaded onto the card.

Prepaid cards are commonly used for budgeting, gifting, travel, and making online purchases without exposing bank account or credit card details. They offer enhanced control over spending, as transactions are limited to the available balance on the card.

How does a prepaid card work?

Prepaid cards operate through major payment networks like Mastercard, VISA, or American Express. Each card is identified by a unique 12-16 digit card number, expiration date, and a CVV/CVC code. Transactions can be made online, in-store, or via mobile wallets like Apple Pay and Google Pay if the card supports them.

When a transaction occurs, the amount is deducted from the card’s balance immediately. Users can typically reload their prepaid cards via bank transfers, deposits, or direct payments through authorised agents.

What to consider when using a prepaid card abroad

Prepaid cards are popular for travel, offering convenience and security when making payments or withdrawing cash in foreign countries. They help travelers avoid carrying large sums of cash and provide a practical way to manage travel budgets. Some prepaid cards also offer favorable foreign exchange rates and minimal transaction fees, making them a cost-effective alternative to traditional credit or debit cards.

Good to know for SMEs and beyond

Prepaid cards offer businesses a secure way to control employee spending and distribute funds with pre-set limits, ensuring expenditures stay within approved budgets. Real-time transaction monitoring enhances financial transparency and accountability.

Unlike credit cards, prepaid cards are easier to obtain as they don’t require a credit check or bank account linkage. Depending on the provider, additional features may include transaction tracking tools, customisable spending limits, and fraud protection mechanisms.

Why amnis is the best choice for your employee cards

amnis offers you a versatile and cost-efficient debit card solution with true multi-currency functionality. Save money on cross-border payments thanks to competitive exchange rates and a transparent pricing model.

Learn more

Explore related topics

Cashback

Cashback is a financial reward where a percentage of the money spent or deposited is returned to the customer. It is commonly offered by credit cards, banks, retailers and online platforms to incentivise spending, saving or specific financial behaviors. Cashback can reduce overall costs and increase savings, making it a popular benefit across various industries.

Credit card

A credit card is a payment card that enables users to make purchases or withdraw cash using borrowed funds, rather than money from their own bank account. Unlike a debit card, which instantly deducts the transaction amount from a linked account, a credit card allows users to borrow up to a set limit and repay it later, usually with interest.

Debit card

A debit card is a payment card that enables users to make purchases or withdraw cash directly from their bank account, such as a checking or savings account. Unlike a credit card, which relies on borrowed funds, a debit card immediately deducts money from the user’s account when a transaction is made.

Interchange fee

An interchange fee is a charge paid between banks for processing credit or debit card transactions. When a customer uses a card to make a purchase, the merchant’s bank (known as the acquiring bank) pays a fee to the customer’s bank (the issuing bank). This fee covers costs such as transaction handling, fraud prevention, and maintaining security.

Mastercard

Mastercard is a global payment network that enables secure electronic transactions between consumers, businesses, and financial institutions. It partners with banks and financial institutions to issue branded credit, debit, and prepaid cards, allowing users to make purchases in stores, online, and abroad.

Prime rate

The prime rate is the interest rate that commercial banks charge their most creditworthy customers, often large corporations. From a currency perspective, it reflects the cost of borrowing in a particular currency and serves as a key indicator of monetary policy. Changes in a country’s prime rate can influence capital flows, foreign exchange rates, and the overall strength or weakness of that currency in global markets.

BACK TO LIST

About amnis

amnis offers a comprehensive platform for international banking, offering a range of tools in one place. Transfer money abroad, exchange currencies 24/7 and collect international money transfer with your own IBAN accounts supporting 20+ currencies. Founded in 2014 in Zurich, amnis is a regulated payment institution under the supervision of the Banking Supervision Section in Liechtenstein (FMA) within the EEA.

Discover amnis