FinTech Glossary

What Are Prepaid Cards?

Prepaid cards are payment instruments that are loaded with a fixed amount of money in advance and can be used for transactions until the balance is exhausted, without being linked to a traditional bank account.

How Prepaid Cards Function in Practice

Prepaid cards operate on a stored-value model where spending is limited to the available balance.

• Funds are loaded by the issuing business or institution
• Each transaction deducts value in real time
• No credit or overdraft is permitted
• Reloads and usage are governed by RBI PPI regulations

Once the balance is fully used, the card must be reloaded or replaced, depending on the program rules.

Why Businesses Prefer Prepaid Cards

Prepaid cards are widely adopted by Indian businesses to replace cash, reimbursements, and ad-hoc expense pay outs. They allow finance teams to issue funds with predefined limits while maintaining visibility and compliance. For organisations with distributed teams, branches, or gig workers, prepaid cards simplify fund distribution, reduce misuse, and ensure expenses are aligned with internal policies and regulatory requirements.

Where Prepaid Cards Are Commonly Used

Prepaid cards are used across multiple business scenarios, including:

• Employee travel, food, and daily allowances
• Petty cash and branch-level operational expenses
• Vendor, contractor, and gig worker pay outs
• Rewards, incentives, and employee benefit programs

By enabling controlled, traceable spending, prepaid cards help businesses stay audit-ready while improving operational efficiency.