Prepaid Travel Cards

Payments Leader

Posted on October 30, 2014

Prepaid cards have become increasingly popular among consumers in virtually all walks of life; amongst travelers, who need safe, convenient purchasing power while abroad, the popularity is even higher. Offering the same convenience associated with traditional debit cards, prepaid travel cards allow consumers to easily budget and monitor their funds through immediate access to balance information and transaction history via web or phone.

Prepaid cards also offer increased security, making them a safer alternative to cash and travelers’ checks. Most providers also offer some level of protection against unauthorized purchases related to lost or stolen cards. Since the cards act independently and are not typically directly linked to a bank or credit account, they minimize losses associated with certain forms of card theft. Most importantly, many prepaid cards give travelers an effective and safe way to transact abroad.

These days, more and more overseas merchants are unable or unwilling to accept traditional magnetic stripe payment cards, thanks to widespread security policies that have made chip-enabled cards the norm outside of the U.S. Embedded with a personal identification number and microchip that validates transactions, chip cards help to prevent fraud associated with magnetic stripes. Already the global standard for Europe and numerous other countries throughout the world, U.S. consumers have turned to EMV-ready prepaid cards as quick alternatives for safer transactions and access to available funds for retail purchases.

Travel chip cards are secure, convenient and flexible. The Travel chip card reduces card acceptance issues while traveling to countries where chip technology is quickly replacing the traditional magnetic stripe. The card works with an embedded microchip – a type of small computer. It requires use of a secure PIN, when used in a chip reader, or signature, when used in a typical swipe terminal. Card usage restrictions such as Online Authorizations Only are systematically enforced.

  • Secure – Reduces fraud resulting from lost/stolen or counterfeit cards. The chip transaction creates a dynamic cryptogram sent in the authorization messaging for each transaction. This eliminates the ability for the card data to be replicated. There is no longer the risk of ‘skimming’ where the magnetic stripe data is stolen and used to create a duplicate card. The chip contains elements such as cardholder verification methods and card offline risk parameters that verify a card’s authenticity.
  • Convenient – Universally accepted. The microchip-based card works the same regardless of the country you visit or the merchants’ system.
  • Flexible – Depending on the issuer and acquirer configurations, chip cards can be used and authorized by various methods: with a PIN, without a PIN, just by reading the chip or prompting for a signature.

Chip cards will still have a mag-stripe on the back of the card for the foreseeable future since it will likely take several years to achieve universal chip card availability, acceptance and adoption.

As financial institutions and merchants scurry to prepare for the transition to chip cards, U.S. consumers will soon become accustomed to chip payment cards and the benefits they bring.

In the meantime, there are Travel chip cards for locations where chip technology is the preferred payment card type. It provides consumers the choice of using a secure prepaid product while traveling and offering the chip capability for use in a chip-enabled terminal.

If you’re interested in learning more, check out the FIS travel card program that’s safe, proven, easy to use and accepted at millions of merchants within and outside of the U.S.

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Payments Leader

Payments Leader from FIS provides insights on credit, loyalty, fraud and emerging payments strategies through blog posts from our industry experienced authors.