A stored value card is a type of card that is widely used today. On this type of card, the monetary balance is kept on the card itself rather than in a financial system. The card has a special magnetic stripe that records important financial information such as the balance on the card. This stripe stores the card's basic information (card number, CVV, expiration date, balance information, etc.).
With this type of card, all information related to the account balance is stored on the card itself. This differs from other card types that keep account information in a financial system (such as a bank), where the card is used only to access the account. If the card is lost, anyone could potentially access the money in the account. For this reason, it is important not to lose the card.
What are the types of stored value cards?
Gift Cards
One of the most common examples is a prepaid gift card. These gift cards are available at most retailers around the world and are offered to customers. Someone who does not have this type of card can go to a retail store, give the cashier a certain amount of money, load as much balance as they want onto it, and start using it in stores.
Public Transportation
This type of card is also frequently used on public transportation. In many cities, there are card types that carry a certain balance. People can use these cards to travel on the metro or buses without having to use cash when boarding public transportation vehicles. The Istanbulkart is an example of this.
Phone Card
Phone cards are also one of the types of stored value cards. Like a public transportation card, a phone card is issued with a certain balance on it. This card will provide the user with a certain amount of phone usage time. The person can then transfer the minutes on the card to their phone and continue their calls through the phone line.
Potential Problems
Although this type of card provides great convenience to users, there are some problems that frequently occur. We can list these problems as follows:
- There is growing concern that the use of stored value cards encourages drug trafficking. By using a prepaid bank card, a person can hold a large amount of money on the card. They can then carry out transactions across international borders without any issue with the card. It can be used as a kind of intermediary tool for money laundering.
- The second potential problem is that, because the card limit information is kept only on the card itself, there is not much that can be done to recover the balance if the card is lost.
