PREPAID payment cards are a recent phenomenon. They have exploded
in popularity across America and are now taking off in Britain – and it’s easy to see why.

The idea is extremely simple. They look like credit or debit cards – with a long card number and the cardholder’s name on the front and a signature strip on the back - and can be used in the same way, using a PIN (personal identification number). But there’s a crucial difference. You can spend only what you or someone else – perhaps a friend, relative or employer – has already loaded on to the card. Unlike with credit/debit ards, you cannot “overdraw” and go into debt. This minimises any risk to the card providers and, as a result, they are happy to issue them to anyone. That’s great news for many people who, for various reasons, have been unable to enjoy the convenience of using cards to shop in the High Street, on the phone or online and can now do just that for the first time.

Vast numbers are joining this payment revolution. Card giants including MasterCard and Visa have now launched prepaid cards, giving customers access to millions of retailers worldwide. It is said that a staggering 360 million prepaid cards will be in use across Europe by 2010.

It’s only surprising that it took this long to dream them up!

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