How to Send Money With a Prepaid Card

Prepaid cards, often used for everyday spending, can also send money to others. They operate on a pre-loaded balance. This guide explores how to leverage prepaid cards for money transfers and the practical aspects involved.

Preparing Your Prepaid Card for Transfers

Determine if your prepaid card is suitable for transfers. Prepaid cards fall into two categories: open-loop and closed-loop. Open-loop cards, branded with Visa or Mastercard, are widely accepted and offer flexibility for transfers, similar to debit cards. Closed-loop cards are limited to specific merchants or networks, unsuitable for general money transfers.

To prepare an open-loop prepaid card, review its terms or visit the issuer’s website to confirm transfer features. Many issuers require identity verification for full transfer capabilities. This often involves providing personal information like your full name, address, date of birth, and a Social Security number or other taxpayer identification number. Once verified, you can link your prepaid card to online accounts or digital wallet services by entering the card number, expiration date, and security code (CVV).

Sending Money Through Digital Wallets and P2P Apps

After linking your open-loop prepaid card, digital wallets and P2P apps offer a convenient way to send funds. Applications like PayPal, Venmo, or Cash App accept major branded prepaid cards as a funding source. The process begins by opening the chosen application and navigating to the “Send Money” or “Pay” feature.

Select the recipient or enter their details, then the amount. Select your linked prepaid card as the funding source within the app. After reviewing details, confirm the transfer. Funds are typically deposited into the recipient’s linked bank account or their digital wallet balance, often within minutes.

Using Dedicated Money Transfer Services

Dedicated money transfer services, such as Western Union or MoneyGram, offer another way to send money using a prepaid card. These services facilitate transfers both online and through a vast network of agent locations. When using their online platforms, you would typically create an account, select the destination country, and input the recipient’s information.

Choose your prepaid card as the payment method. After confirming transaction details and fees, you receive a tracking number for recipient pick-up. For in-person transfers, present your prepaid card and identification, provide recipient details, and specify the amount. The agent processes the transaction, and you receive a receipt with a tracking number for the recipient to claim funds, often in cash.

Key Considerations for Transfers

When sending money from a prepaid card, consider fees, limits, and security. Various fees may apply, such as transaction fees from the card issuer or transfer service. International transfers may incur foreign exchange fees, calculated as a percentage of the amount. Some prepaid cards also have loading fees, indirectly impacting transfer costs.

Transfer limits are imposed by both the card issuer and transfer service. These limits can be daily, weekly, or monthly, restricting the maximum amount you can send. For instance, some prepaid cards may have daily top-up limits of around $6,000 or monthly limits of $30,000. Check these limits beforehand to ensure your desired transfer amount is permissible.

Security during transfers is important to protect your funds. Always verify recipient details, as an error could send funds to the wrong person, making recovery difficult. When conducting online transfers, use secure and private internet connections, avoiding public Wi-Fi networks. Be vigilant against common scams, such as requests for payment via prepaid cards from unknown parties or for suspicious reasons. Protecting card details (number, expiration date, CVV) is important to prevent unauthorized use.