A Stored-Value Card
What is a Stored-Value Card?
A stored-value card is a payments card with a monetary value stored on the card itself, not in an external account maintained by a financial institution.
Stored-value cards differ from debit cards, where money is on deposit with the issuer, and credit cards which are subject to credit limits set by the issuer. Another difference is that debit and credit cards are usually issued in the name of individual account holders, while stored-value cards may be anonymous, as in the case of gift cards. Stored-value cards are prepaid money cards and may be disposed when the value is used, or the card value may be topped up, as in the case of telephone calling cards or when used as a fare cards.
Examples & Visual Showcase:
The Two Types of Stored-Value Cards
1. Closed Loop Stored-Value Card
Are single-purpose cards issued by a specific merchant or a merchant group (e.g., store gift cards usable only at that exact store or merchant chain).
2. Open Loop Stored-Value Card
Are multipurpose cards that can be used to make debit transactions at a variety of different retailers and locations.