The Evolution of Prepaid Cards

Multiple benefits such as security, ease of use and practicality have helped position prepaid cards to appeal to a wider audience. The development of how the prepaid card is perceived from generation to generation is one for the books. But before anything else, what is a prepaid card?

What is a prepaid card?

A prepaid card is plastic payment card like debit and credit cards. However, it bears numerous differences from those two. For one, a prepaid card needs not to be linked to the user’s bank account.

This type of card has no value unless it is loaded with funds. The premise here is that the user has to reload every time the funds have been used up after a purchase. When the card balance is zero, the card is useless.

In this article, we will look back at the impressive evolution of prepaid cards – from mere payment plastic cards to full-scaled financial and banking tools. 

The development of prepaid cards

Primarily, the prepaid card system was born out of gift cards. It was in the 1980’s that gift cards have become widespread as an exclusive mode of payment that is only accepted in specific merchants. Later on, this system evolved into a plastic version of the gift certificates.

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Payroll cards also emerged in the late 1990’s because it became an efficient way to pay the unbanked workers. Today, prepaid cards are considered a flexible spending tool and a more practical choice than credit cards and debit cards.

The prepaid card is definitely the next big thing in the world of cashless transactions. It is a current trend that is going nowhere but up.

The trend in prepaid card users

Prepaid card users used to be just for the unbanked population. This population consists of people who do not have bank accounts under their name. Since prepaid cards do not need to be linked to the user’s account, this is the best choice for those who want to get a no-frill plastic payment card.

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However, prepaid cards have caught the attention of the banked population as well because of its unmatched advantages. More and more people prefer prepaid cards over credit cards to avoid hefty charges, interests and fees. Prepaid cards have also become a popular choice for parents as a tool of giving allowance to their children.


A prepaid card is indeed a powerful tool that serves both the unbanked and banked population. It has come a long way since it was first introduced to the world. As technology advances year by year, payment systems will also continue to evolve. 

Thus, it is safe to say that the prepaid card will continue to evolve and bring out more features that might even topple down credit and debit cards big time. 


Written by 

Nitish is a Finance tips author of several publications of Insurance and experiences in life. he is a regular contributor to online article sites on the topics of Banking allover the world.

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