Loading Prepay card - Pay by debit card or bank transfer?

OceanSound

I've just signed up for a WeSwap Prepaid Mastercard through the moneysupermarket.com site. It's offering a free £35 topup if you load by £500 or more. Yesterday, I tried loading £500 using my FirstDirect debit card, the transaction was refused immediately. (see my post on the Overseas Holidays and Travel Planning forum).

When I phoned WeSwap the nice lady told me there are many other ways to load. e.g. bank transfer, google pay, apple pay. However, I think the debit card payment method is far superior to the bank transfer method because it can offer chargeback protection. i.e (heaven forbid) the company goes in to administration.

This is all the more relevant because it seems WeSwap is not regulated by the Financial Conduct Authority (FCA) and the Financial Services Compensation Scheme (FSCS) wouldn't apply. (Actually, WeSwap is regulated by the Financial Services Commission (FSC), Gibraltar)

Plus, there are other considerations. A bank transfer may incur a fee (a hefty one at that). The WeSwap website says this (repeated twice on the same page-Dosen't anyone proof read these pages before publishing?)

We don't charge anything to load your account (as we are part of SEPA) but some banks may impose a fee for this. Check with your bank if they will charge you for making a bank transfer.

Then there is this:

Our mistake was to transfer from my partners account and although the transfer was accepted a transfer should be in the account holders name...in this case me.
To access our money we were told my partner would have to send a screen shot of his online bank account showing the transaction...we weren't entireley comfortable doing this for obvious reasons.

Seems an amateurish error (to pay from an account not in your name), however, perhaps there could be issues to do with middle name (I sometimes don't use my middle name due to length, not using it caused Fineco Bank to reject my bank account application and I had to go through the process all over again).

Re. using debit card to load. I think banks have faced issues with fraudsters loading prepay cards, spending the money, then claiming charge back. Perhaps this was the reason my first attempt to load was declined?, has anyone been able to do an initial load on a prepay card using debit card? Or did you need to call the bank after the load was refused? (may be it's worth calling the bank even before doing the first attempt and pre-arranging?)

BTW, if anyone from WeSwap can see this. Please change your support telephone line automated voice prompts. It's barely comprehensible even when sober.

dj1471

Your bank declined the transaction so it's them you'll need to speak to, prepaid cards are high risk for fraud.

Chargeback is not guaranteed to work, especially if the company are in administration. There's a 120-day time limit too.

londoninvestor

OceanSound wrote: »

has anyone been able to do an initial load on a prepay card using debit card? Or did you need to call the bank after the load was refused? (may be it's worth calling the bank even before doing the first attempt and pre-arranging?)

I funded my Transferwise Borderless from my Metro debit card with no problem. That was only £20 though; not sure whether £500 would have been a problem.

OceanSound

dj1471 wrote: »

Chargeback is not guaranteed to work, especially if the company are in administration.

There is evidence (from the link I posted earlier that there are instances where it has worked (where the company has gone in to administration)). Anyway, it paves the path for you to take the complaint further (e.g. Financial Ombudsman). Chargeback is less effective than section 75 (an option we don't have because you cannot load with a credit card), but is more of a guarantee than not having anything to fall back on (which is what you would be opting for if you do a bank transfer).

There's a 120-day time limit too.

The 120-day limit is the general time frame. However, some claims can be made beyond this. See same link:

Some claims CAN be made after 120 days, but the longest cut-off period is 540 days from the date of the initial transaction.

Your bank declined the transaction so it's them you'll need to speak to.

I only saw your post this morning, however, I did give firstdirect a call last night. Only because I finally managed to read what it says on the error message coming-up on the WeSwap site. (Eventually I managed to take a screenprint of the error, before it disappeared after 3 seconds.) I'll post the screenprint and my experience with First Direct later.

prepaid cards are high risk for fraud.

I know!, paying for girls online and gambling sites are probably classed lower risk, especially if paid with a credit card.