The future of prepaid cards in the world of online purchases

Prepaid cards, in our country, are an increasingly used tool for transactions, especially online ones

The reasons for this diffusion can be found in the management costs contained, in the convenience of making payments, even from smartphones, and in the fact that it is rechargeable cards, with a maximum spending limit within the availability on the card, as well as the ceiling assigned by the issuing company. The best prepaid cards are the ones with no management fees.

Online prepaid cards: an overview

the prepaid cards online they are a Fintech tool, a term that derives from the union between the Anglo-Saxon words Financial and Technology.

Financial, because they are tools for making payments, money transfers from your bank account and other operations concerning money management.

Technology, because the relationship with the companies that issue them takes place exclusively in digital mode, through dedicated apps that can be downloaded on the smartphone.

In this sense, for many financial products of this type the physical support is also absent, since the card data is stored on the user’s device, which can rely on an encrypted data protection system and on passwords or touch recognition. to access the smartphone and the prepaid card app.

The owner of the digital prepaid card, to start using it, you will not have to go to one of the branches of the bank, because the entire process of request, approval and authentication takes place online, through facial recognition and identity documents with a video call or a video, uploaded to the app.

This management method ensures that the costs associated with the maintenance and use of the reloadable prepaid cards they are considerably lower than those associated with so-called traditional credit cards, issued by banks or financial companies, which apply annual fees and variable commissions, depending on the operations carried out.

The numbers of prepaid cards in the diverse universe of online purchases

In this scenario, it appears that the future of reloadable prepaid cards, also in Italy, is characterized by a progressive and growing expansion.

In fact, even the numbers would confirm this finding since, in the first half of 2021, transactions with digital cards exceeded 100 billion euros.

These data have been elaborated in a recent research conducted by the Observatory of the Politecnico di Milano, with particular reference to Digital Innovation by the School of Management, established at one of the most renowned and accredited universities in Europe.

Among the factors that have contributed to the spread of digital payment cards, both in purchases at physical stores and at online ones, the recent pandemic emergency emerges and, connected to it, the fact that an increasing number of merchants, after reopening, is equipped with a POS for receiving payments in digital mode.

This is a series of interrelated elements because, if in 2020 the driving force to carry out transactions in digital stores has reached its maximum, the new normal is to save the data of your prepaid card on your smartphone and propose it again. on the occasion of subsequent purchases.

According to the data expressed in the study by the Politecnico Observatory, the increase in payments with digital papers is 9%, considering that, in Italy alone, in 2020 more than half of Italians tried at least one alternative method to traditional cash payment, requesting a debit or prepaid card in digital format.

While 2020 proved to be a catalyst in the process of accelerating the use of digital tools to carry out online transactions, today Italians feel more at ease in using prepaid cards for the purchase of goods and services.

The costs and methods of using digital cards

The costs and the how to use prepaid cards online largely depend on the type of financial product chosen. In this context, virtual prepaid cards work, however, the same way.

In fact, the basic prerequisite is to have a smartphone connected to the network (with data traffic or wireless) and on which to download the application relating to the virtual payment card you want to use.

All the companies that offer these products make apps available for both Android and iOS systems, so users will not be bound to choose a card to the operating system of their smartphone or tablet.

After registration, which requires the insertion of some mandatory data and theprior approval of the company issuing the digital card, this can be used immediately, by generating a temporary code.

The codes, at the end of the transaction, disappear automatically, therefore they can never be proposed again.

The disposable virtual cards, on the other hand, are like the physical ones, but saved on the smartphone.