Quidity and other PrePaid cards

BigSteveLondon

Thanks for all the info Psykicpup & hurrah.
That link to 'Which PrePaid, that isn't the real Which people is it? The people behind Which Report

Anyway, the info is good, especially as there is also a huge list I can use with my paypal account. This will make me feel a lot better about using Paypal in general if they have no bank account to link to.
But this also complicates matters with regards the fee structure. It's huge, and varies so much. From the charges to put your own money onto the card, to spending it, to service it monthly, to whatever else they can think of lol.

All i need to work out is the best 2 or 3 with regards fees, and usage, then i'm away. :rotfl:

MARTIN WHERE ARE YOU!

I'll go check moneysupermarket to see if they have any comparisons.

Cheers you lot.

marke_3

I don't see why there really needs to be a monthly/yearly fee or a transaction charge for the prepaid cards.

Unless I'm mistaken - the card issuer still gets their usual merchant fee (usually 20p/ 2.5%-ish) from the shop that processes the card.

Also there's no risk to the banks etc as the money is pre-paid!

IMO its yet again the banks taking advantage of those who have no real choice but to use these cards.

orangemollie

Yes, you are correct. The bank issuing the card will still receive a revenue stream from interchange (or merchant fees as you refer).

The value is, however, much less than your estimation. It depends on whether the card is running on the debit (e.g. Maestro) network, or MasterCard/Visa (credit) network.. It also depends on how the transaction was acquired. Mail order, mag acquired and CHIP acquired transactions attract different rates of interchange. But, to be honest, I suppose this is no the point in question. A more relevant question is “why should a consumer pay a monthly fee when its their money”.

At the end of the day, the card issuer is not making valuable interest, late fees or over limit fee revenues. Yes, they would get float interest on all of the unspent funds, but not much else. Also remember that Fraud still occurs on these cards + some issuers voluntarily provide their customers with the same protection that they get with a credit card under the credit consumer act. So, for example, if the retailer goes bust, the bank will step in.

The main product offerings out in the market place today are either based on load fees (I.e. you pay a fee each time you load your card) or fixed monthly fee. The majority are very clear on their pricing. For some consumers that cant get credit or a basic bank account, a few £’s on a monthly fee is well worth the convenience of being able to spend and transact on the internet.

If I gave you £200 cash and £200 on a prepaid card, your £200 on the card would stretch much further on the internet, than the £200 cash on the high street. You could save 6 months worth of monthly fees or load fees in one transaction.

Remember it costs the bank money to run and maintain an account. Nothing is free..

I think we will see the price of prepaid cards come down over time as new card issuers pop-up. It’s a trillion $ market in the US.

In summary, yes there are fees, but it’s a “service” that can be extremely cost effective.

BigSteveLondon

Mmm some good points.

So orangemollie what would be a good criteria for selecting a card.

• A large company/provider (less risk of going bust)
• A low loading fee
• Low or no annual fee
• Other linkable benefits like the Starbucks thing, or a link with Tesco etc.
• Whether it's Visa, Mastercard, Switch, Meastro, whatever

Cheers

orangemollie

Thanks Big Steve… I will try and answer your questions,

• A large company/provider (less risk of going bust)

This is a valid point. Personally, this would be less important to me. The larger prepaid providers that allow larger load amounts (£5000) are issued via UK banks, although, not necessarily high street banks that you would immediately recognise. The chances of them going bust is minimal, however, you would struggle to get your money back if this did occur.. Most have a clause in the T&C’s - -

The Financial Services Compensation Scheme is not applicable for this Card. No other
compensation schemes exist to cover losses claimed in connection with this Card. This
means that in the unlikely event that XXXXXX becomes insolvent your funds
may become valueless and unusable and as a result you may lose your money.



• A low loading fee
• Low or no annual fee

This very much depends on your intended use. If it will be used frequently for purchase rather than cash, and regular reloads are being put onto the card, then I would always go for a monthly fee based product. It’s a fixed £x per month for the service, and all my purchases are free

If I were going to use the card for emergencies, I would go for either a “pay as you go” type card, or one the does not charge a monthly fee, but instead a reload “topup” fee. It would work out more cost effective.

If I were going to use the card regularly for cash, I would look very carefully at the cash advance fees! (or similarly at foreign transaction mark-up, if I were going to use outside of the UK)


• Whether it's Visa, Mastercard, Switch, Meastro, whatever

Personally, I would always go for a full Visa or Full MasterCard brand + CHIP&PIN. Visa Electron and Maestro are good, but have disadvantages.. They are not widely accepted at retailers and Maestro will struggle on holiday… Both will have lower acceptance on the internet for a while to come (especially if purchasing on the internet from outside of the UK).

A lot of the “teen” type Maestro cards also have a number of restrictions in place on over 18 type retailers. This could also cause problems depending on your circumstances.


This is just my thoughts, but hope it helps.

BigSteveLondon

That's brilliant!

Ok cool, for me and my occassional net purchaces (that don't allow paypal) I'll look for a Pay as You Go, Visa or MasterCard PrePaid.
I can then remove my bank details from paypal altogether and just list the card only.

If i can find one that also gives me benefits or credits like the Starbuck one (say Tesco, M&S, petrol), then i'd be completely set.

Thanks again

achtunglady

Hi, i have applied and got one of these prepaid credit cards. It cost £9.95 for the card, £1.95 for the admin fee. It is a chip and pin cashplus mastercard, so, secure and knowing it will be accepted in more retailers than others

The option that comes with it is a £4.95 per month monthly subscription, which means no purchase fees, or there is the option which you can change to a pay as you go fee of £1 per transaction instead.
Reloading onto the card is free,( done at post offices) £2 per atm withdrawal in uk, £3 abroad, cash withdrawal at bank £3, and foreign transactions are 2.75% of amount withdrawn/spent. Only down side is its only valid for a year, after that the cycle starts all over again, oh and if you want to cancel the card it costs £10, and a replacement is £9.95

Hope this helps you make your choice a bit easier!!

orangemollie

No problem…If only it were that easy!

You can certainly use a prepaid card to fund your paypal account. Also, so long as its not an anonymous card, you can also register it for extended registration (they will do an address verification)

There is some good info here

http://www.which-prepaid-card.co.uk/prepaid-card-questions/register-prepaid-paypal.html

However, you can’t wire money from your paypal account TO your prepaid account. In order to do this, you would need a sortcode and account number for the prepaid card..

Technically, you could get the issuers bank details (i.e. the details the card issuer would provide you, enabling you to add funds via standing order or PC/telephone banking), however, this wont work!

Paypal have fraud checks in place that don’t allow the same bank account and sort code to be registered against multiple paypal accounts.

That said, if you only intend using the card to pay for items on paypal, then you are 100% fine!

Good luck!

orangemollie

Hi, also further to Achtungladys good info...

Cashplus do not charge a renewal fee. I appreciate it’s in their T&C’s, but if the account is run well, its waived! I have had one of these for a while.

The pay as you go version of the cashplus card would be more appropriate if you only use occasionally (no monthly fee and £1 per purchase tran).

achtunglady

Ahhh! Have just seen that they charge £4.95 if there is no reload/use of card in 120 days, so top up once a month or every three months if you can remember!!