A prepaid card is a customized card, with or without a chip, that is not linked to a bank account and does not carry a credit limit like credit cards; it can only be used to spend up to the amount loaded onto the card.
Prepaid cards are payment cards just like debit cards or credit cards. They carry a card number, expiration date, and security number (CVV). They can be used at any ATM and merchant that accepts cards.
What are the advantages of prepaid cards?
- Fewer procedures are required to get the card
- Prepaid cards are easy to use
- Easier and more secure payment than cash, across a wide merchant network
- It is a payment card used by loading money onto it. It is ideal for paying bills and shopping via POS and online.
- A lost or stolen card is blocked and its balance is transferred to a replacement card. (This applies to cards linked to an account.)
- Can be used at any ATM and merchant that accepts cards.
- A prepaid card's balance is protected by a PIN, so the card balance stays secure.
- It is very important for the goal of a cashless society and for bringing the informal economy into the formal record.
Who prefers prepaid cards?
- Public Sector: Used for government assistance, pension payments, child benefits, highway toll payments, public transportation, disaster relief, and similar payments.
- Universities: Used as student cards at universities, for campus entry/exit, cafeteria use, canteen use, etc.
- Transportation: Used widely for travel cards, transit cards, and many similar purposes.
- Family Use: Ideal for families who want to set a spending limit for their children without opening a bank account, while still letting them use a card.
- Corporate Use: Companies prefer prepaid cards for business expenses, instantly loading balance for employees rather than issuing them a credit card or a bank-account-linked debit card.
Examples of prepaid cards in Turkey
The following cards are examples of prepaid cards in Turkey:
– Ininal Card
– Paycell Card
– Manibux
– Papara Card
What to watch out for when using a prepaid card
A prepaid card is a payment instrument that can be lent to someone else. If you hand over your credit card, you are also entrusting your credit standing to that person, but with a prepaid card you only put the balance on the card at risk, and even that is capped at 750 TL a month under the anti-money-laundering communique. You can give the card to anyone you like to use without risking your financial standing. This also makes it possible for people who are in Turkey temporarily or without legal residency to use a card in the local currency, and lets people under 18 buy products and services online (from smartphone app stores, games, and e-commerce sites) without waiting to reach the age limit.
Advances in mobile apps, our country's widespread ATM network, and partnerships with retail stores have made it much easier to load prepaid cards. This has driven the growth in prepaid card usage.
For people under 18, even though prepaid cards may not be issued in their own name, they give young people a card they can take spending responsibility for, making them a useful instrument for building children's financial awareness.
In conclusion, prepaid cards are a payment instrument that makes life easier, both because they limit spending to the balance on the card and because of their ease of use and security.