Prepaid Cards and E-cash

Prepaid cards are gift cards or Visa and MasterCard branded payment cards, portable, valuable, exchangeable for cash or products (via an ATM or shop purchase), and anonymous. Key risks:

  • Anonymous card holders and funding, access to funds

  • High value limits, and no limits to the number of cards that can be acquired

  • Global access to cash at ATMs

  • Offshore card issuers

  • Substitute for bulk-cash smuggling

  • There is some regulatory discrepancies over prepaid cards – in Germany adding value is considered the same as making a deposit, so prepaid card institutions are considered credit institutions, and are regulated. In the US regulations do not exist that cover such situations.

  • Stored value cards (or electronic purses) hold the funds physically on a chip inside a card.

Ways to reduce risk:

  • Limit the functions and capacity of smart cards

  • Link new payment technologies to financial institutions and bank accounts

  • Require standard documentation and recordkeeping

  • Allow the examination of records by investigating authorities

  • Establish international standards for the above measures





Value stored on card


Open system cards

A Visa, MasterCard, or American Express card that can be used in ATMs and retailers

Usually not, often embossed with the card holders name, looking similar to a debit or credit card

Yes: electronic banking, via retailers

Usually no – transactions authorised in real-time

Visa or MasterCard prepaid cards

Semi-open system cards

Same as open cards, without ATM access (purchase only)

No – same as open cards


Usually yes – lost and stolen cards/vouchers cannot be replaced

Closed system cards

For buying goods from participating retailer.

Typically yes

Often not, but some cards can be reloaded

Usually yes – lost and stolen cards/vouchers cannot be replaced

Proprietary gift cards

Semi-closed system cards

Can be used at selected retailers

Usually yes

Often not, sold at preset denominations

Usually yes – lost and stolen cards/vouchers cannot be replaced

Gift cards or vouchers that can be used at a range of merchants.

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