This is an umbrella definition referring to all the cards in the prepaid market. Unlike credit cards, prepaid cards are pre-loaded with a value and you can only spend up to that value. That is to say, you won’t be given any credit that you can off at a later date. As well as gift cards, the prepaid card market also covers travel money cards, prepaid debit cards, salary and payroll cards, expense card, insurance replacement cards, various government cards and even transportation cards such as the oyster card used on the London Transport.
These are the modern plastic version of paper vouchers and make up about 21 per cent of the prepaid card market, representing the largest sector. Gift cards fall in to one of three categories:
Most retailer gift card programmes are “closed loop”. This means that the retailer that issues the card also redeems the card. You will not be able to spend the money on the card anywhere other than back with the retailer from where it was purchased.
An “open loop” card is a card that can be spent with a number of different merchants. The cards issued and redeemed using the open payment network such as MasterCard or Visa. This means an open loop card using the MasterCard network, for example, can be spent at all the places where MasterCard is accepted.
Prepaid cards can also be categorised as “controlled loop/semi-open/restricted loop cards”. In this instance, card utilise the open payment network for redemption. However, redemption is restricted to selected merchants.
Prepaid cards that can only be redeemed in the retailers that subscribe to the programmes that the card relates to.
Prepaid cards that can be redeemed in any retailer that displays the Master Card or/and Visa logo, but the programme only promotes certain retailers or products, implying that the card is to be used for only these.
For all definitions relating to the Gift Card and Prepaid card industry please click here > TERMS OF REFERENCE
Currency, tender and store credit can be stored or loaded onto physical or digital solutions, which are defined in the below definitions -