Cash is no longer king. Plastic has become the preferred method of payment across the world. Today, cards are the smart and modern alternative to cash. They are more convenient, safer than carrying a wallet full of cash and they work anywhere, even online. Besides the widespread use of credit and debit cards, another card that is gaining popularity is the prepaid card.
Emerging popularity of prepaid cards
Prepaid cards have become more diverse and are more widely available than ever before. Across the globe, consumers are getting more and more aware of their distinct advantages, and are adopting them to meet their payment needs. Governments in countries with highly-developed payment card markets, as well as those with emerging markets, are issuing social benefits to their citizens via prepaid cards. Many employers have also begun to issue salaries and card-based vouchers to their employees instead of paper cheques. Other uses of prepaid cards include gifting, transit-ticketing, money transfers, and many other purposes.
The benefits of prepaid cards
Opting for a credit card, debit card or a prepaid card is a matter of choice. Although usability and appearances of all three are similar, the services, advantages and functionality of each are markedly different. A prepaid card has compelling benefits for all, and especially for people who do not have a bank account.
· It is ideal for students. Easy to use and hassle-free, the prepaid card can be topped up by parents at any time, and makes it easy to control pocket money. Signing up for mobile alerts will also keep parents updated on where and how much money their child is spending.
· Stay at home mothers could use it to manage the household budget and keep track of expenditures.
· People without a bank account can use this as plastic money without getting into the charges associated with banking and credit/debit card management. This is especially true if the prepaid card comes loaded with value added features. For instance, with a RAKBANK prepaid card, you automatically become eligible for discounts & offers at select merchants.
· Visitors to the UAE, who do not have a bank account and consequently cannot be issued a credit or debit card, benefit greatly from prepaid cards. If the card is loaded with the local currency (AED), they will not have to pay currency conversion fees. However, for transactions performed in other currencies, a currency conversion fee will be applicable. The other advantage is that they no longer have to carry large amounts of cash.
· Prepaid cards also encourage financial discipline, as you can spend only the amount loaded on the card.
Prepaid cards offer cardholders more convenience, flexibility and secure access to funds. They enable their holder to supervise spending, budgeting and bill payments, thereby simplifying money management process. As consumer needs change, prepaid card , too, will be loaded with additional benefits. According to market experts, the growth in prepaid cards will be driven by low cost and it’s convenience to consumers.