Open-system prepaid credit cards are those that are submitted by a company such as MasterCard or Visa and received at any store anywhere that the network is accepted. Basically, these types of plastics are not credit cards because no line of credit is issued to the customer, although the consumer controls the sum of funds in the account because it is pre-paid. There are maximum limits to the amount of money that can be on it at any time, although these limits are high enough to accommodate most consumers and buyers.
Currently, there are mainly three types of prepaid cards used by merchants. They are as follows:
- Open system
- Semi-closed system
- Firm system
Understanding the difference between the systems will facilitate the choice of prepaid cards to pay. Open-system prepaid cards are widely marketed to people without credit, credit, or those who do not have a traditional bank account because their work is very much like a debit card without a bank account. Such cards are subject to full legal regulation as verification information is required to open the account. These identification details include the social security number, address, customer name and phone number.
Despite the fact that no credit check will be performed, this verification information is required as the effect of the USA Patriot Act. The fees associated with these plastic cards are quite reasonable. These have been disapproved of as unjustified because the issuer does not take any credit risk.
An online prepaid card is only provided for "customer not present" transactions. From the moment no prepaid card is issued, it can only be used virtually for shopping and can not be used in person when a real piece of plastic should be offered.
Prepaid plastic used to pay employees is also available. State-authorized electronic delivery cards for food stamps and other federal benefits also constitute this type of plastic because they are accepted throughout the network and have identification information. Near credit cards, these prepaid plastics will eventually carry an account number, an end date and a verification number. They may also be in possession of service fees and additional charges related to the operation or non-use of these. The type of provider is based on the law that governs them.