Payment cards have become a permanent part of our lives. It is convenient, allows you to take advantage of discounts or rebates and eliminates the need to carry cash in your wallet. One of the types of cards that few people remember are prepaid cards. In our article we will try to answer the question “What is a prepaid card?” Who can use prepaid cards and we will briefly introduce the presentation of these cards on the Polish banking market.

At the end of 2019, the Poles had about 43 million different payment cards in their wallets. In addition to the famous “debit cards” and “loans”, which together account for almost 94% of the card market in Poland, there is a slightly forgotten category – the prepaid card. How do these “plastics” work? Let’s check it out!

What is a prepaid card?

We had a real problem identifying the prepaid card. While most of us can intuitively refer to prepaid features, there is really a problem with the formal interpretation of this concept. No definition can be found in the Payment Services Act or the Banks Act, so we first examined what banks write about a prepaid card.

Bank Millennium describes a prepaid card as “you can deposit any amount of money into it several times. After transferring money to the card, you can use it to make contactless payments for everyday purchases in Poland and abroad, as well as make online payments and withdraw cash from ATMs ” . On the other hand, ING writes that with a prepaid card you can pay wherever you want, contactless at payment terminals and for online shopping, and that you pay with the card as much money as you need.

We found the best explanation in the Payment Cards Quarterly by NBP. So if you want to know what a prepaid card is this definition should clear your doubts:

Prepaid cards allow you to make payments using the funds available in the payment account designated for the card. Before using the card, the account must be filled with funds, for example by means of a transfer order ordered in the Internet banking service or in the form of a cash deposit at a bank branch.

For our part, let us add that prefabricated items are issued only in Polish zloty.

Prepaid card problems

Until a few years ago, prepaid cards were very popular in Poland and banks eagerly issued them to customers who, in turn, appreciated the ease of obtaining them and the anonymity of using “plastic”. However, the latter fact began to raise doubts by the Polish Financial Supervisory Authority. You spend without a contract with the customer, which, in turn, can be used for money laundering (the prepaid card can be freely charged and withdrawn, for example at an ATM, hiding your identity). Banks were required to verify the identity of the holders of these tools, which made the prefabricated materials completely disappear from the market.

Prepaid Card – Cardholder and User

An adult may be the holder of a prepaid card who submits the application and signs the contract with the bank. It is not always necessary to have an account with a particular institution – a prepaid card is issued under a separate agreement, not related to the ROR – but sometimes a personal account facilitates the process of applying for the card.

When it comes to a prepaid user, a 13-year-old can become one (with a few exceptions) . We can order the Card for any person – child, spouse, or siblings – and upon entering into the contract, information will be required to identify the user of the Card. For example, in Bank Millennium, you must provide the name, surname, PESEL number, identity document and address of the person who will use the card, while in ING we will require a prepaid card only for ourselves or our child.

At this point, it is worth noting that banks use different solutions when it comes to the data on the prepaid card. In some institutions, the card is personal, that is, user data is displayed on it, while in other banks, prepaid cards do not have this information.

PKO Junior Card in PKO BP

In the case of this prepaid one, we had a hard time falling apart. According to the information on the bank’s website, the PKO Junior card is a debit card; However, we looked at their terms and conditions and came to the conclusion that in fact they fulfill all the conditions of a prepaid card! A card is issued to the child at the request of the parent in a separate account, the owner of which is an adult; This interferes with the operation of the debit card, which is always issued at the request of the account holder. Although PKO BP advertises the PKO Junior card as a discount card, it is worth paying attention to these differences.

Prepaid Card – ATM Withdrawal and Purchase Payment

It may seem that since the prepaid card works on slightly different principles, it also has limited functionality. Nothing could be more wrong. We can easily pay with a prepaid card in stationary stores and online, and we will also withdraw money from ATMs.

Unfortunately, prepaid payments available at local banks do not allow you to pay over the phone via Google Pay and Apple Pay. Not only that, prepaid cards in cooperative banks do not have the option of contactless payment, and therefore their use will require inserting “plastic” into the device each time.

How do I charge a prepaid card?

Let us remind you that using a prepaid card requires funds in advance of the linked technical account. This power supply is not complicated, you just have to choose one of two options :

• Transfer to the card account from an account in the same bank or in another bank,
• Pay at the cash deposit machine or bank branch.

It all comes down to knowing the card account number. A person entering into an agreement with a bank usually has the option to add the card from the Internet banking level, however, in practice, anyone can top up the prepaid card, but depositing into a cash deposit machine will require a physical card.

Some banks also offer to transfer money from a prepaid card to a personal account.

Prepaid Card – Bank Offer

We still feel the “purification” in the raw materials we mentioned. In commercial banks, we count only three such cards – they are offered by Bank Millennium, ING and PKO BP. However, it should be noted that prepaid cards work well in the co-operative sector; We can find it in banks associated with Cooperative Banking Group and BPS Group.

Let’s look at the costs of prepaid cards in banks operating in Poland.

As you can see, a common feature of prepaid cards is the costs. You will pay at least 15 PLN for the prepaid version, but – with one exception – the use of “plastic” will be free of charge. When it comes to ATM withdrawals, the situation is similar to debit cards – they are free to withdraw money from special bank machines (sometimes also from the Planet Cash network).

Arranging prepaid cards

If you are considering using a prepaid card and giving it to your loved one, take a look at our statement. We have included both generic cards and prepaid cards for kids.

Prepaid corporate cards

Prepaid cards are often used by large companies and organizations . Advance offers in this case are used for settlements with employees, for example for business trips, training, company purchases, etc. Employers have access to the transaction history, thanks to which the company’s finances are under greater control. On the one hand, advance services allow entrepreneurs to control the expenses of their subordinates without interfering with their privacy, and on the other hand, they help prevent fraud (for example, when an employee uses a card for the main corporate account).

Corporate prepaid cards are available, for example, at Bank Millennium, ING, mBank and PKO BP.

Prepaid Gift Cards

Like prepaid banking, gift cards for shops , for example Rossmann, Biedronka, Empik, etc., are very popular. Many of us happened to receive such a card as a gift or as a promotional prize, often in the form of a digital code only. This “plastic” is provided in a specified quantity during purchase, which can only be used for purchases in a specific chain of stores (mostly also online) until a certain day. Most importantly, the gift card cannot be reloaded! When we use the available funds or when the prepaid expiration date expires, the remaining funds are forfeited. It is also not possible to withdraw the remaining cash on the card, for example from an ATM.

A prepaid gift card differs from a bank card in another version – it can be purchased by almost anyone, without signing any contract, and there is no user data on the “plastic”.

Prepaid cards can come in handy

Sometimes we don’t realize how many situations a prepaid card can be useful. For example, online shopping. Many people refuse to enter their debit card details online in order not to fall victim to theft. A prepaid card may be the solution – you just add an amount to cover the cost of the purchase, and the money left in your personal account stays safe.

Advance offers (not just bank cards!) can be a good gift or some form of pocket money for a child. If you want to teach your child how to deal with banking, it is worth ordering a prepaid card for him and providing it every month with a small amount so that the child can pay the small expenses. When you are looking for a gift idea, a prepaid gift can also be a bull’s-eye – the other person can spend the money on the chosen goal, and you will avoid the lost gift.

You don’t have to be afraid of a product like a prepaid card. Withdrawing from ATMs is the same as in the case of normal debit, we can also easily pay in traditional stores and online stores around the world. The only problem may be the limited availability of such a card in local banks, but nothing prevents you from using the offer of cooperative banks. A prepaid card can be useful in various situations, and it is worth remembering when using our account on a daily basis.