Type of Cards

Prepaid cards - this is an umbrella definition referring to all the cards in the prepaid market. Unlike credit cards, prepaid cards are pre-loaded with a value and you can only spend up to that value. That is to say you won’t be given any credit that you pay off at a later date.

As well as gift cards, the prepaid card market also covers travel money cards, prepaid debit cards, salary & payroll cards, expense cards, insurance replacement cards, various government cards and even transportation cards such as the Oyster Card used on the London Underground. 

• Gift cards – These are the modern plastic version of the paper vouchers and make up about 21% of the prepaid cards market (in terms of value or physical cards issued?) and represent the largest sector.
• Closed Loop - Most retailer gift card programmes are ‘closed loop’ - this means that the cards are redeemed using the retailers’ private payment network. For example, a card that can be redeemed in all the outlets of only one merchant such as the Debenhams Gift Card at all Debenhams outlets only or the Laura Ashley Gift Cards at Laura Ashley outlets only.
• Open Loop - An ‘open loop’ card is a card that is redeemed using the open payment network such as MasterCard or Visa. One example would be the Western Union Travel Cash Card that can be redeemed wherever Maestro is accepted globally as well as used to withdraw cash at ATMs worldwide. 
• Controlled Loop - Prepaid Cards can also be categorised as ‘controlled loop / semi-open / restricted loop cards.’ In this instance, cards utilise the open payment network for redemption. However, redemption is restricted to selected merchants. An example would be the Capital Incentives ‘Compliments’ Card that can be redeemed in over 60 merchants within the UK.

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