DidiCash platforms associated with prepaid debit cards were designed to handle more complex authorization procedures. This could include limiting use of the card to certain categories of merchants or particular merchant locations. It could also include restricting use of the card to purchase of particular products or services if the merchant is able to send information about the items being purchased. Prepaid debit cards can also have multiple “purses” associated with a single card. For example, a prepaid debit card could have a general spending purse and a savings purse.

Open and closed Network Pre-paid Cards

Many types of prepaid cards are available in the market, but the two main categories are “open-loop” and “closed-loop.” Open-loop cards are network-branded (e.g., American Express, Discover, MasterCard or VISA) and can be used wherever the prepaid cards bearing the network appearing on the face of the cards are honored. Within the market for open-loop cards, there exist many different card products—or “verticals”— such as gift, payroll, travel, health-care, government benefit, disaster-relief and incentive. Each of these prepaid card verticals services the specific needs of a target market with differing product features. Closed-loop cards are typically sold by merchants, can be used only at merchant locations, typically are not reloadable, and normally can be redeemed only for goods or services.

Open Loop vs. Closed Loop —

“Open loop” means that the debit card is connected to an association or network and the card can be used at any merchant in the association or network. “Closed loop” is the term used for debit cards that are issued by a particular retailer and can only be used for purchases at that particular retailer. The most common closed loop cards are store gift cards. Some debit cards are hybrids of open loop and closed loop, in that they have a network or association brand, but they do not work at all merchants where that brand is accepted.

• Reloadable vs. Non-Reloadable

— Reloadable prepaid cards operate very much like a bank account and the card issuer must validate the identity of the cardholder in essentially the same process as if the consumer was opening a bank account. Money can be loaded onto a reloadable card via direct deposit of pay or government benefits (the same as if the employer or government agency was depositing funds to a bank account). Consumers can also load money onto their cards at retail locations that participate in a reload network (such as GreenDot® or MoneyGram®) by giving cash to the retail store clerk to load onto the card. Non-reloadable prepaid cards are not associated with an individual. Because of their anonymous nature, there are strict limits on the dollar amount of funds that can be loaded onto a non-reloadable card.

PIN and/or Signature —

Debit cards can be issued with PIN and signature cardholder authentication, just PIN, or just signature. When a PIN is used, the card is processed over a network and the transaction is considered final at the time the authorization is approved. When a signature is used, the authorization is routed through an association, but the merchant must send an end-of-day electronic file to the association with all of the day’s authorized transactions before the movement of money will occur. Cards that allow ATM access must have a PIN. Many retailers allow customers to obtain cash back with purchases when a PIN is used. Cards that only use PINs are not able to be used for e-commerce purchases or bill payments at merchant web sites.

• Registered or Anonymous —

All reloadable cards must be registered to a particular individual. Consumers with non-reloadable cards can register the card or use it anonymously. The advantage of registering a non-reloadable card is that it can then be used to make e-commerce or telephone purchases. Many online merchants will not accept unregistered cards because of the high risk of fraud.

• Primary or Companion Card —

Both bank account-based and prepaid debit cards can have more than one card linked to a specific account. Two cards can both access the same funds or each card can have its own balance. Bank account based debit cards have one balance shared by the primary and companion cards. Prepaid debit cards can operate similarly, but they can also be set-up to allow the primary cardholder to transfer funds to the companion card. In that case, each consumer has access only to the funds on his or her card, not the combined balance.

• Flexible Spending Account (FSA)Cards —

Open loop prepaid cards linked to flexible spending accounts allow in-store and online purchases directly from the funds in the FSA – consumers do not have to file claims for reimbursement. FSA cards use signatures for authentication and do not have PINs or ATM access. Use of FSA funds is restricted to purchases of approved medical and healthcare products and services. Funds in the FSA cards are legally the property of the plan administrator and can only be loaded to the card by the plan administrator. FSA’s operate on a “plan year” and at the end of the plan year, FSA administrators zero-out any remaining balances on the FSA card.

• Health Savings Account (HSA) Cards —

 HSA’s are savings accounts associated with high deductible insurance plans. An employee participating in a high-deductible insurance plan can open an HSA account at a bank and either the employee or employer deposits funds to the HSA. These funds earn interest tax-free and the funds can be used for out-of-pocket medical costs. At this time, there is no requirement that HSA account providers substantiate that the funds are used for medical purposes, and employees can withdraw their health savings funds in cash through an ATM or bank teller.


  • Disposable or reloadable

  • Branded with a Discover logo or EFT network such as NYCE
  • ATM and POS terminal access
  • Optional expiration date
  • Custom card design available
  • Instant issue available for non-branded ATM card only
  • Card carrier with PIN number available
  • Value added through Internet, VRU, or batch transmission
  • Activity and balance information available through Internet or VRU

Consumer Benefits

  • Easier to carry and present than checks or cash
  • Convenient way to obtain cash at ATMs
  • Alternative to traveler's checks, money orders, and cashier's checks
  • Safer than carrying cash

Issuer Benefits

  • Opportunity to earn additional interchange for every signature merchant purchase
  • Additional revenue opportunities
  • Card fees
  • Transaction fees
  • Expired funds
  • Strengthen existing customer relationships
  • Turnkey program setup and management
  • Product can solidify other business processing relationships




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