The rising popularity of prepaid cards is driven by the increasing need for cashless payments, enhanced financial security, and easy accessibility without credit checks. Whether used for shopping, travel, corporate expenses, or online purchases, prepaid cards offer flexibility and wide acceptance—both online and offline.
Digital payment modes like corporate credit cards and prepaid cards enable companies to make payments with greater ease and security. For growing businesses, prepaid corporate cards and virtual cards can support smoother marketing spends, vendor payments, and other operational expenses. Virtual cards are also a part of the same category of digital payments.
What is a Prepaid Card
A prepaid card is a type of payment card that is loaded with funds in advance, and you can use only the amount available on the card. It works like a debit card, but there is a difference; a debit card is directly linked to your bank account, whereas a prepaid card is not connected to any bank account.
Unlike credit cards, which offer a line of credit, prepaid cards let you spend only the money you have already loaded onto the card. Prepaid cards are widely used as gift cards, travel cards, and fuel cards. They can also be used for bill payments, online shopping, and in-store purchases, which makes them a convenient and secure digital payment option.
Prepaid Card Example
- EnKash Prepaid Card
- HDFC Bank ForexPlus Card
- ICICI Bank Meal Card
How Prepaid Cards Work
Once you receive your prepaid card, you have to load it with the required funds using UPI or other available payment methods. After the balance is added, you can use the card at POS machines, for online shopping, and for in-store purchases, based on the amount you have loaded. If the card issuer permits, you may also withdraw cash from ATMs. Because spending is limited to the preloaded balance, prepaid cards offer better control over expenses while reducing the risk associated with direct bank account access.
Here is the breakdown of the steps for prepaid cards work
1. Load Money Onto the Card
You can top up a prepaid card using:
- Net banking or UPI
- Mobile wallets
- Bank transfer
This loaded amount becomes your spending limit. Since it’s prepaid, there is no risk of overspending or debt.
2. Use It for Payments Anywhere
After loading funds, you can use the prepaid card just like a regular card:
- Online shopping
- POS machine payments
- Subscription payments
- ATM withdrawals
Some cards also support contactless tap-and-pay features.
3. Track & Control Spending Easily
Most prepaid cards come with apps or dashboards where you can:
- Check balance in real time
- Monitor transactions
- Set spending limits
- Reload instantly
This makes prepaid cards ideal for budgeting and safe digital payments.
Track and control spending in real-time.
4. Reload When Needed
A prepaid reloadable card lets you add money multiple times. Once the balance is low, simply top it up again through your preferred method. You cannot reload non-reloadable cards like gift cards.
5. Enhanced Safety & No Credit Risk
Since prepaid cards are not linked to your primary bank account, they offer an additional layer of security. Even if lost, the risk is limited to the preloaded amount.
Types of Prepaid Cards
Different types of Prepaid Cards are:
Type of Prepaid Card |
Short Description |
Use Cases |
|---|---|---|
Open-Loop Prepaid Card |
Accepted at all merchants on Visa/Mastercard/RuPay/Amex. Works like a regular card, but prepaid. |
Online shopping, POS payments, ATM withdrawals, and travel. |
Closed-Loop Prepaid Card |
Can be used only at a specific store or brand. |
Brand shopping, store payments, gifting. |
Semi-Closed Prepaid Card |
Usable at a network of approved partner merchants. |
Food delivery apps, retail stores, and utility bill payments. |
Allows multiple top-ups; balance can be reloaded anytime. |
Daily expenses, budgeting, student payments, travel. |
|
Loaded with a fixed amount at the time of issuance and cannot be topped up again. It can be used only once. |
One-time gifting, promotional offers, controlled spending, and limited-use payments. |
|
Digital-only card for secure online transactions. |
E-commerce, OTT subscriptions, digital services. |
|
Preloaded card used mainly for gifting or rewards. |
Festivals, corporate gifting, employee incentives. |
|
Supports single or multi-currency loading; made for travellers. |
International trips, business travel, and foreign ATM use. |
|
Issued to employees for controlled business spending. |
Expense management, rewards, vendor payouts, and travel allowances. |
Read More: Prepaid Loop-Cards
How to Get a Prepaid Card
Getting a prepaid card is simple, fast, and does not require a traditional bank account. Because prepaid cards work on a load-and-use model, users get complete control over spending and enhanced payment security.
Steps to Get a Prepaid Card
1. Choose EnKash as a Prepaid Card Issuer
2. Complete Basic KYC Verification
Most prepaid cards require a minimum KYC. You may need to submit:
This ensures secure usage and higher reload limits.
3. Load Money Into the Card
After verification, you can add funds using:
- UPI
- Net Banking
- Debit card
- Wallet transfer
- Bank transfer
The amount you load becomes your spending limit.
4. Activate Your Prepaid Card.
Physical cards require activation via app, SMS, or customer portal. Virtual prepaid cards are usually activated instantly after KYC.
5. Start Using the Card
Once activated, you can use your prepaid card for:
- Online shopping
- POS payments
- Travel bookings
- Subscriptions
- ATM withdrawals (on supported cards)
Prepaid Card: Advantages and Disadvantages
Digital and physical prepaid cards have significantly supported the growth of scaling businesses. As such, cards are a prominent mode of digital payments in India, and companies are gradually transitioning to prepaid company credit cards as they are easy to use and cost-effective.
Listed below are some of the imminent digital payment advantages and disadvantages of using a prepaid credit card in India.
Advantages
Prepaid cards are a great alternative to standard debit or credit cards. With companies transitioning to the digitization of their entire business process, prepaid company credit cards constitute a dynamic financial tool to make payments faster and easier.
Cards like these offer the business centralized authority over the company’s funds, as every transaction detail gets recorded accurately with the date and payment specifications in the company’s digital accounting records.
Prepaid cards are not directly linked to the business’s main bank account, so they do not affect the company’s credit score. They are useful for expense control, not for building credit.
Businesses can easily set withdrawal and spending limits on prepaid company cards to ensure optimal use of business funds, since these cards are preloaded with a specific amount set by the issuer.
Having a set amount on the card encourages the employees to use the card responsibly and make informed spending decisions to avoid exhausting the set budget before time.
Disadvantages
Many digital payment companies in India offer prepaid card facilities to growing companies, but with hidden fees like transaction fees, monthly maintenance fees, or inactivity charges.
Therefore, companies must choose a reliable card issuer or platform from the many digital payment providers in India and clearly understand all applicable fees.
Since transactions made through pre-loaded cards are generally not reported to credit bureaus, they do not help in building or improving credit scores. As a result, the company cannot achieve better credit scores even with the most cognizant use of pre-loaded cards.
Pre-loaded company credit cards do not accrue any interest, so the amount stored in the card remains the same with or without withdrawal. This means that the amount on that particular card is as good as having physical cash in hand.
Significance of Prepaid Credit Card in India
Prepaid cards are typically linked to a card ledger or digital wallet instead of a traditional bank account. The issuer loads or reloads value onto the card or wallet, which is then used for payments. For example, businesses can quickly issue a prepaid company credit card associated with a digital wallet to their employees to undertake authorized business expenses on behalf of the company.
With pre-loaded cards, companies can also streamline disbursements such as reimbursements, incentives, and allowances. In addition, it also allows the company to provide incentives to well-performing employees by offering prepaid cards as gift cards with monetary incentives loaded into the card.
A prepaid company credit card enables the business to preload the cards with a specified budget issued to the employees as an employee benefit, giving the company complete control over the business funds. Furthermore, as the employees have a tight budget to adhere to, they naturally become more responsible while making spending decisions.
A company in its growth stage may have funding requirements. For that, any lender or financial institution will evaluate the business’s creditworthiness using factors such as financial statements, bank history, and existing credit facilities. Prepaid cards do not directly improve credit scores because they are not credit products and are generally not reported to credit bureaus.
However, they can help businesses manage spending more transparently, which supports better overall financial discipline.
Benefits of Prepaid Cards in India
Prepaid cards are preloaded by the issuer/company with a set withdrawal limit. Therefore, prepaid company credit cards give the company complete control over business funds, as employees cannot overspend.
Cards like these are reloadable, allowing the company to deposit money into them as and when required.
The company can decide whether it wants to reload the pre-loaded company credit cards monthly, quarterly, daily, or yearly based on the use of the card explicitly issued to each employee. This ensures that the company can curb the risk of financial leaks by allocating business funds rationally.
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Conclusion
Prepaid cards have become one of the most convenient, secure, and flexible ways to manage everyday payments. Whether you’re looking for better budgeting control, safer online transactions, or an easy payment method without needing a bank account, prepaid cards offer a simple and reliable solution. With options like virtual prepaid cards, reloadable cards, travel cards, and corporate expense cards, users can choose the format that best fits their lifestyle or business needs.
As digital payments continue to grow, prepaid cards provide a smarter and more secure alternative for both individuals and businesses. Platforms like EnKash further enhance the experience by offering instant card issuance, powerful spending controls, and seamless fund management. Choosing the right prepaid card empowers you with greater financial freedom, transparency, and convenience in the digital-first economy.
FAQs
1. What is a prepaid card?
A prepaid card is a payment card that lets you spend money you load onto it in advance. It is not linked to a bank account and works on a simple top-up and use model, making it ideal for safe, controlled, and cashless transactions.
2. What does a prepaid card mean?
The prepaid card’s meaning refers to a card funded before use. You load a specific amount onto the card, and you can only spend up to that limit. This helps with budgeting, secure online payments, and managing daily expenses.
3. What is a prepaid payment instrument?
A prepaid payment instrument (PPI) is a regulated financial tool issued by banks or licensed fintechs that allows users to load stored value and use it for payments. PPIs include prepaid cards, digital wallets, and virtual cards approved by regulatory authorities like the RBI.
4. What is a prepaid debit card?
A prepaid debit card is similar to a debit card, but not connected to a bank account. You load money onto the card first, and then use it for ATM withdrawals (if allowed), online shopping, and POS payments. It offers banking-like convenience without needing a bank account.
5. What is a temporary debit card?
A temporary debit card is a short-term or limited-use card issued for immediate or emergency spending. These cards may have lower limits and shorter validity, and are often used until the user receives a permanent debit or prepaid card.
6. What are the types of prepaid cards?
The main types of prepaid cards include:
- Open-loop prepaid cards
- Closed-loop prepaid cards
- Semi-closed prepaid cards
- Reloadable prepaid cards
- Virtual prepaid cards
- Travel prepaid cards
- Gift cards
- Corporate prepaid cards
Each type serves specific needs like shopping, travel, gifting, or business expenses.
7. Are prepaid reloadable cards safe?
Yes, prepaid reloadable cards are safe, as they are not linked to your main bank account. Even if lost or stolen, the risk is limited to the loaded amount. Most reloadable prepaid cards also offer PIN protection, instant balance tracking, and secure digital controls.
8. What is a Prepaid Reloadable Card?
A prepaid reloadable card is a payment card that allows you to add money multiple times and use it for everyday transactions. Unlike a one-time gift card, a reloadable prepaid card works on a top-up and spend model, meaning you can recharge the card whenever the balance runs low. It is not linked to a bank account, giving you full control over how much you load and spend.
A reloadable prepaid card is ideal for budgeting, online shopping, travel, employee expenses, and secure digital payments, offering the flexibility of a debit card without the need for credit checks or a bank account.
9. Is an ATM card a prepaid card?
No, an ATM card is not a prepaid card. An ATM card is directly linked to your bank account and allows you to withdraw cash or make payments using the funds already available in that account, whereas a prepaid card works on a stored-value system where money is loaded onto the card in advance and you can only spend up to that preloaded balance.
