Prepaid card woes

I’ve got a prepaid Mastercard, as I’m sure many of you have too. And I’m also sure, you’re in no doubt aware of the acceptance issues of a prepaid card.

This is hopefully not a daft question, but why are there issues? What do retailers/card processors see against prepaid cards compared to a standard debit/credit card?

I’m not. Could you summarise?

I recently started using a prepaid card (few weeks ago) and haven’t yet experienced issues, although have not yet used widely.

Prepaid cards only work online so aren’t suited for merchants who use offline authorisations (planes, trains, TfL). This is because you have no ability to go into overdraft and as such there is no guarantee that the merchant will be able to collect their money

Debit cards, on the other hand, will always make the funds available even if it means putting you into an unauthorised overdraft

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Ha, sorry. Really should have explained…

Basically as @ndrw mentioned, some providers just won’t accept them. I experienced this a few years back with Coconut and DigitalOcean, but I know people have experienced the same issues with Tide (both of which are prepaid).


Thanks @ndrw - that’s interesting! The payment I’m trying to make is a payment towards a holiday, tried both online and over the phone, both of which won’t accept them.

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How does Curve fit into this?

Is it treated like a bank debit card or like a prepaid card?

Neither seems suitable.

Not always true. Some e money accounts have proper debit cards and can be rejected when the funds aren’t available.

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There are online and offline debit cards too. Someone on MSE mentioned that depending on internal risk scoring Barclays will either give you one or the other for instance

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Not quite true, debit cards are usually set to online preferring, with offline fallback, but can also be set to online only (like prepaid cards).

There is a still a slight different between an actual prepaid card and online-authorisation debit cards, however, as the card type is encoded into the card BIN and terminals may be set to reject prepaid cards for a variety of reasons - so acceptance of online debit cards is usually slightly better.

Everything else you’ve said is completely correct, though, and you are spot on about the transaction processing being the main difference.

Curve was initially, during it’s beta, a pre-paid card which appeared to merchants as prepaid.

Now the Curve card is a debit card (a change made to improve acceptance) but works almost like a prepaid card with it’s “live reloading” in the background. Technically, as an e-money product, Curve works by finding out how much you want to spend when authorisation is sent from the merchant, immediately charging the underlying card to buy the equivalent amount of “e-money” from Curve and then immediately funding the transaction on the Curve card with that e-money, all in one go. So it is quite complicated but appears, to the merchant, like any other debit card.

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So in a scenario where a prepaid card is connected to Curve…

For offline transactions (of the sort mentioned as problematic for prepaid cards in an earlier post) would the transaction go through via Curve even if the underlying prepaid would not work if used directly?

Where a prepaid card is connected to Curve, the merchant sees it as a debit card while paying with Curve charges the underlying prepaid card, like normal.

However, you may run into issues using Curve with a prepaid card as it could be impossible to charge the prepaid card if the prepaid card company detects unusual usage (for example).

Theoretically, certain offline transactions (like using TfL) should be possible as Curve is a online-preferring debit card. Curve would charge the underlying card once the offline transaction went through and, if it couldn’t be processed for any reason, would use Anti-embarrassment mode. However, there is some risk to Curve with this which is possibly why they only allow a list of pre-approved prepaid cards to be used with Curve.

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Interesting idea. Had to give it a go to see if it could get around the issue. But unfortunately, Curve gives me an error saying they don’t support prepaid cards :disappointed:

The card you tried must not be on their approved list then!

I tried to add a ‘To the Moon Debit Card’ to Curve and it failed

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Why did I set it up? For £10 airtime credit.

Why did I try to add it - I genuinely can’t answer that one.

I don’t have the finance account anymore…

The mobile side isn’t a bad way to access EE off contract.

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I think I just couldn’t ever want to combine mobile and card. Too much “vendor lock-in” for my taste.

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I wouldn’t entrust them with more than £20

They took 2 weeks to set up my finance account & admitted they needed to wait for their finance consultant to ‘come in’ to resolve it, lol.

Regardless of how good they think they’re idea is, it won’t lock anyone in in its current iteration.

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