Prepay Purchase Protection - Your Consumer Rights

Prepay Purchase Protection - Your Consumer
Rights

If I have a problem with goods that I purchase, or the merchant goes bankrupt, am I protected under the Credit Consumer Act, if I used my prepaid card to pay for the transaction or service?

One of the most important parts of the Consumer Credit Act (CCA) is one that few people are fully aware. Section 75 of the Act means that when you buy something using your credit card, your contract is with both the merchant (retailer) and the company that issues your card. They both have an equal liability if anything goes wrong so you can take action against either of them to get compensation. This is restricted to goods or services purchased for more than £100, but is extremely beneficial if something should go wrong with your transaction e.g. the retailer goes bankrupt!

The CCA covers everyone with a credit card, but given that prepaid cards do not fall under the CCA, as the bank is not lending money, you are not covered.

Only one prepaid card issuer in the UK voluntarily offers consumers this valuable protection, so make sure you consider this when selecting a prepaid card appropriate for your needs. If you only intend getting a pre-paid credit card for cheap international money transfer then this may not be important to you. However, if you intend using the card to purchase goods or services on the high street and internet, this could be valuable prepaid protection!

Do Prepaid credit cards improve my credit rating?

I have a poor credit rating – Can a prepaid card help to improve my credit score, and does my account history update information held with Experian or Equifax?

Whilst prepaid credit cards can be a very useful product for those with a good credit rating, many card providers target their prepaid products at those with bad or no credit history. With the number of IVA’s (Individual Voluntary Arrangement) and bankruptcy cases on the increase, there is a growing population in the UK that are unable to get a traditional credit or debit card, without paying extremely high fees.

However, given you are loading your own money onto your prepaid card, and the card issuer is not lending you money, information relating to your prepaid account is generally not exchanged with the credit bureaus (Equifax and Experian). So, whilst you may maintain a healthy balance and operate your account within the card providers terms and conditions, this good history will not improve your credit rating.

Welcome to to World of Prepaid Cards

What is a Prepaid Credit Card?

The definition of a prepaid credit card is: A payment card (usually MasterCard, Maestro, Visa Electron or Amex), pre-loaded with your own money, which you can then use wherever the payment card is accepted, including on the internet and abroad.

A prepaid card is much like the gift cards available from most high street chains in the UK, however, prepaid cards have a much wider acceptance, and can be used internationally. They are the same as credit cards, but without the credit. The majority of UK prepaid card providers offer cards embossed with your own name, and some are even CHIP & PIN cards.

Qualifying for a Prepaid Card

A prepaid card is not a credit facility, so you do not need to pass a credit check. Even if you have bad credit or CCJs you are guaranteed to be approved for a prepaid card. However, like most Money products, you are still required to provide details verifying your identity and address (for example a passport, driving licence or national identity card + utility bill or an official letter with your permanent or temporary UK address). Some of the UK prepaid card issuers will even verify your details online, and give you an instant approval. This is an electronic identity check, not a credit check!

Welcome to the world of prepaid cards...

This leaflet has been prepared to help you find out more about prepaid payment cards and how you can use them best.

Although they’re relatively new, prepaid cards are becoming more and more popular. Many stores offer ‘prepaid gift cards’ - you may have already used one! But prepaid payment cards aren’t just limited to gift cards. There are prepaid cards for everything, from sending money to family and friends, to managing travel funds, to shopping over the Internet.

Independent research tells us that, by 2010, people across Europe will collectively have around 360 million prepaid payment cards in their pockets at any one time.

With so many cards likely to be around in the future, the prepaid payment cards team at MasterCard Europe want to ensure that as many people as possible know what to look for when choosing a prepaid card that’s right for them.

This leaflet underlines our desire to help all consumers make an informed choice. We hope that you find it both reassuring and useful.

Prepaid cards - an introduction to what they are

A prepaid card is a payment card that can be loaded with money by you or someone else.

A prepaid card looks just like a normal credit or debit card, with a card number, signature strip and company branding. But prepaid cards are unlike credit cards, which provide you with a line of credit. They are also very different from debit cards that are linked to a bank account with an overdraft facility. This is because you can’t borrow money with a prepaid card - you can only spend the money you have loaded onto it.

As your prepaid card is a MasterCard or Maestro card, you can use it anywhere in the world that accepts MasterCard and/or Maestro.

How prepaid cards work – without the technical bits

You can use a prepaid card in the same way that you would use a debit or credit card. It’s easy to use your card. To buy something, this is all you need to do:

At the shops
Simply hand your card to the salesperson at the till.

Telephone shopping
Read out the card details over the phone.

Mail order shopping
Complete the order form, including the card details.

Internet shopping
Input the card details at the ‘check-out’ step of your Internet purchase.

When you use a prepaid card, the money is immediately taken from the amount loaded onto the card - not from a line of credit or a bank account. As long as you have enough money available, you can continue to use your prepaid card to buy what you need.

When the amount remaining on your card is low or at zero, you may be able to reload (or ‘top up’) your card in a number of ways, such as:

- cash top-up at post offices or convenience stores,
- funds transfer from a bank account,
- on-line through an Internet account.

Please check with your card provider for details.

What you need to get a card

You may need to provide proof of your identity and your address when applying for a prepaid card - but that’s all. There are no credit checks or any other information that you need to provide. Once you have been given or sent your prepaid card, you will need to activate the card by following the instructions from your card provider.

When you buy a ‘prepaid gift card’, you don’t usually need to provide address or identity details. These cards may be given to family and friends, who can then use the card like a gift voucher, until the money loaded onto the card has been spent. This type of card cannot be re-loaded.

Choosing a prepaid card

There are many types of prepaid card for you to choose from. Look at the features of each card and consider those which are important to you, such as on-line account management, the ways in which you can reload the card, and the availability of additional cards on the same account. It makes sense to choose a card that has low fees and charges for the way in which you want to use the card most.

For example, if you just want to use a prepaid card for travelling abroad, a card that has low foreign exchange fees and overseas charges is likely to be the most appropriate. Shop around to find the card that has the best deal for you, then compare the features and benefits on offer.

Ideal solutions

A prepaid card is an ideal solution for you if you:

- want to give someone a gift - a MasterCard or Maestro prepaid card is more widely accepted than vouchers or store gift cards.

- are travelling abroad and don’t want to carry cash or traveller’s cheques. A prepaid card is more secure because it can be blocked if it’s lost or stolen.

- want to help younger family members learn about managing their money. They can only spend as much money as is loaded onto the card, and the spending can be viewed on-line.

- want to manage your money by separating it into different places for different purposes. You could have one card for everyday shopping, one for travel, one for on-line purchases, etc.

- are having difficulty opening a bank account or getting a credit or debit card for some reason. You don’t need to pass a credit check to get a prepaid card.

Things that a prepaid card may be used for

- Everyday shopping
- Internet shopping
- Mail order and telephone order
- Topping up your mobile phone
- Paying bills
- Paying monthly subscriptions
- Withdrawing cash from ATMs

Benefits for cardholders

Convenience
- Prepaid cards can be used wherever MasterCard and/or Maestro are accepted

- Anyone can get one – no need for credit checks or a credit history

Money management
- Can help you budget your money
- No interest charges on the card
- There’s no danger of going overdrawn on the card. Once the money
loaded onto the card has been spent, you can’t spend any more until you’ve reloaded it

Security
- Carrying a prepaid card is safer than carrying cash. The card can be blocked if it’s lost or stolen

Comparing prepaid cards to debit and credit cards

Prepaid card	Debit card	Credit card
No credit checks	Credit check to open the bank account to which the card is linked.	Credit check to approve card, decide credit limit and set interest rate.
No line of credit (so no borrowing and no debt).	Account can have an overdraft facility.	Line of credit that can be increased over time
No interest charges	Interest charges on money borrowed against an overdraft and with no interest free period.	Interest charges on money borrowed against the credit limit, if there is an outstanding balance after the interest-free period.
Fees may be charged depending on the type of card. Read T and Cs carefully where they will be clearly explained.	Fees if you exceed an agreed overdraft.	Charges such as late payment fees, over-limit fees, cash advance fees, foreign exchange charges, duplicate statement fees and nonactivity fees. These are explained in the T and Cs for each card product.
Only require basic customer information.	Require full customer information.	Require full customer information.
Can be used wherever MasterCard and/or Maestro are accepted, depending on the brand mark on your card.	Can be used wherever MasterCard and/or Maestro are accepted, depending on the brand mark on your card.	Can be used anywhere MasterCard is accepted.
Can sometimes be used at an ATM	Can be used at an ATM	Can be used at an ATM
Can be cancelled/blocked if lost or stolen.	Can be cancelled/blocked if lost or stolen.	Can be cancelled/blocked if lost or stolen.

Frequently asked questions

Where can I use a prepaid card

You can use your prepaid card wherever MasterCard and/or Maestro are accepted, including: retail shops, over the Internet, mail order and by phone - at home and abroad.

To keep track of your spending every time you use your card, the balance will be checked electronically with your card company before payment is made. In some circumstances your card may be declined because there is not enough money loaded onto it. This security feature exists to protect you from spending money that you do not have.

What are the fees and costs of having and using a card?

There are many types of prepaid card available for different purposes. You’ll see gift, travel and everyday money cards, to name but a few – and the services they provide are charged for in different ways. Compare the features and costs of similar types of prepaid card to find the best deal for you.

Some of the common fees and charges for prepaid cards:
- Card application fee - to set up your account and provide you with a card.

- Monthly service charge – this may entitle you to certain services such as a helpline or on-line service.

- Card loading fee – to load more cash onto your prepaid card. This may vary depending on how you top up your card (if you load funds onto your card from a bank account, you may be charged a fee by your bank).

- ATM withdrawal fee – there may be a charge for with drawing money from an ATM (cash machine). A higher charge may apply when withdrawing money from ATMs abroad. You may also be able to use certain ATMs free of charge and/or make a limited number of free ATM withdrawals or deposits each month.

- Purchase or on-line fee – you may be charged for each transaction, or for certain types of transactions.

Can I use prepaid cards to withdraw money from an ATM?

You can use your card to withdraw money from any ATM worldwide wherever MasterCard and/or Maestro and/or Cirrus are accepted, provided this feature is available on your card.

Can I use prepaid cards abroad?

You can use most prepaid cards anywhere in the world that accepts MasterCard and/or Maestro cards – just like a debit or credit card. Please check with your card provider for details.

Can I use prepaid cards to shop on-line, over the phone and by mail order?

Yes you can. You can use your prepaid card with any retailer that accepts MasterCard and/or Maestro.

Can I use a prepaid card to make regular payments, such as for monthly subscriptions?

Some prepaid cards can be used to make regular payments. Please check with your card provider.

What makes prepaid cards safe?

Because you must enter your PIN code to use most prepaid cards, it’s a safer way to carry money instead of cash. If your card is lost or stolen, most card providers will allow you to ‘stop’ the card and some may arrange for a replacement to be sent to you.

What happens if my card gets lost or is stolen?

If your card is lost or stolen, you must report it to your card company immediately. Usually your money will be frozen so no one else can use the card. Some card companies will voluntarily replace money stolen from your card – but not all of them do.

How do I load money onto my card?

There are a number of ways to reload (or ‘top up’) your card, for example: cash top-up at post offices or convenience stores, by funds transfer from a bank account, or on-line through the Internet.

The ways in which you can reload your card will vary. Please read the information provided by the card provider for details of how and where you can load money onto your card.

What’s the difference between a ’reloadable’ and a ‘non-reloadable’ card?

A ‘reloadable’ prepaid card can be ‘topped-up’ with money. Cards that are loaded once (e.g. gift cards) are ‘non-reloadable’ and can’t be ‘topped-up’.

Is there a limit to how much money I can put on my card?

Some card companies may set a limit on how much money you can load onto your card at any one time. For prepaid cards that you can buy without any proof of address and/or identity, the maximum amount of money that you can load onto the card will generally be much less when compared to reloadable cards.

Can I see a history of how I have used my card?

Yes, many card companies provide this option. When you pay with your card, details of the transaction are stored on-line. This information includes the dates, locations and amounts of your transactions. All of this will appear on your on-line statement, so you can check and access details easily.

What is the minimum age for having a prepaid card?

Prepaid cards are generally available to all ages, although some companies require you to be at least 18 years of age to use their cards. There will be restrictions on cards that are available to persons under 18 to prevent their use for inappropriate spending (e.g. gambling and alcohol).

How many cards can I have?

There are no limits on the number of prepaid cards that you can hold. Bear in mind that there could be fees and charges for each card that you buy – think carefully about how you will manage these costs.

Where can I get one?

Prepaid cards are available from a variety of companies and locations. Some of the places that you can get prepaid cards include banks, over the Internet, and at participating retailers.

Can I Use Prepaid Cards on Paypal and Ebay?

Yes you can!

If you don’t have a debit or credit card, or simply just don’t want to use your bank account or credit card details online, prepaid cards provide a great solution.

You can use your prepaid card to register on paypal and start sending money or shopping on ebay immediately.

However, if you are registering for a new paypal account, you will be subject to a reduced spending limit (currently £1000). Once this threshold has been reached, you are required to verify your paypal account and register bank account details, in order to lift this spending limitation.

In order for you to register your prepaid card, paypal will check your address. So remember, the address that you provide when you set-up your pre-paid account, must match the address details that you provide when registering for an account with paypal. Otherwise, the address details will not match, and you may experience problems with the registration process.

Anonymous prepaid cards or vouchers, which are usually loaded with a fixed credit and are not re-loadable, can also be used on paypal.

Please note that whilst most prepaid cards may be used with a paypal account, they will not enable to you set-up an ebay sellers account or withdraw money from paypal. In order to do this, you would require a bank account.

Prepaid Anonymous Offshore Reloadable Debit Cards can be used as:

·  Cash Deposit Card

·  Instant loading Card

·  Gift Card

·  Cash Card

·  Corporate Expense Card

·  Prepaid debit Card

·  Travel card

·  Family card

·  Money Transfer card

·  Agent Payment card

·  Payment card

 

Use reloadable  prepaid anonymous offshore debit card while travelling

One of the safest means of carrying money while traveling is to use the Prepaid Reloadable Offshore Debit Card. The prepaid anonymous offshore debit card can be used to receive money in every country and removes the trouble associated with money exchange. It is a highly secured and safe mode of carrying money for the tourists.
Anonymous prepaid reloadable  offshore debit card is a card for anonymous cash withdrawals and POS purchases.

FAQ – prepaid anonymous  offshore debit cards

Prepaid anonymous offshore debit reloadable card offers what is known as "stored value" cards. Quite simply, that means that you store money in an account and access it by using your card at a bank machine (ATM).

Q: What name will be printed on the prepaid anonymous offshore debit card?

A: There is no individual name printed on prepaid anonymous offshore debit card.

Q: Does your prepaid anonymous debit Card expire?

A: Expiration is 2 years from card issue date .

Q: Who can apply for the prepaid anonymous ATM offshore reloadable debit Card?

A: Anyone can apply regardless of his credit history or status. Offshore Pro Group cannot sell prepaid anonymous offshore debit cards to citizens of Burma, Cote d’Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Iran, Iraq, Lebanon, North Korea, Sudan, Syria, Zimbabwe.

Q: Your site says offshore, but where offshore?

A:Belize . The prepaid anonymous offshore debit cards are issued by a reputable Belize bank, member of SWIFT and Mastercard.

Q: How do I know when I withdraw funds that the bank cannot trace back to where the prepaid anonymous debit card was issued then get my address where it was issued to?

A: Every ATM transaction is traceable, however the cards are not linked to a bank account directly and there is no name printed on the card, therefore the maximum possible privacy is guaranteed.

Q: Are there different types of prepaid anonymous debit cards?

A: Yes and no. All  prepaid anonymous debit cards function in basically the same way, but they can be put to a number of different uses. Your employer can use the prepaid anonymous debit Card as a more convenient and less costly way to pay you. You can send a prepaid anonymous debit card to someone as a gift. You can use a prepaid anonymous debit card to transfer money to relatives overseas. Insurance company can use prepaid anonymous debit cards to pay claims. In short, the possible uses are virtually endless.

Q: How secure is my money with prepaid anonymous reloadable debit card?

A: The prepaid anonymous offshore reloadable debit  card is more secure than an onshore bank card. Like an onshore bank card, nobody can get at your cash without your Personal Identification Number (PIN). What's more, unlike an onshore bank card, the maximum risk that you face is the amount of money stored on the card. With a normal bank card, someone who steals both your card and PIN may be able to clean out your entire bank account. When it comes to the question of security, the term "stored value" may be a little misleading. The money is not actually stored on the card. It is stored on our secure computers and can only be accessed if you provide your PIN when you use your card at an ATM, at a store or on our Web site. Your PIN is not stored anywhere on your card!

Q: How is Cash ATM Card better than cash?

A: There are lots of ways that ATM card beats cash. To name just three:
1. Anonymous debit card is more secure than cash. If cash is lost or stolen, it is likely gone forever. If your card is lost or stolen, it can be replaced. No one can get at your money unless they also have your PIN. (We recommend that you do not write down your PIN or, if you do write it down, never keep it in the same place as your card.)
2. The prepaid anonymous offshore debit card is a global money. When you use cash, you usually have to exchange your money for local currency when you travel out of the country, which can be a costly and time-consuming inconvenience. With ATM cash card, you can use your card at any worldwide ATM where you see the Cirrus or Maestro logo. All cash withdrawals and purchases are automatically in the local currency.
3. You can safely send the prepaid anonymous debit card in the mail. The post office and courier companies tell you not to use their services to send cash.

Q: How is prepaid anonymous reloadable cash card better than using a bank card?

A: 1. Prepaid anonymous reloadable debit card can be used in more places. You can use the prepaid anonymous debit card anywhere that you see the Cirrus or Maestro symbol.
2. Electronic money transfer card can be used to send gifts or transfer money. Since an ordinary bank card and PIN gives the holder access to your full bank account, they are not a good way to send a gift or transfer money to others. The prepaid anonymous offshore Card gives a recipient access to only as much money as you add to the card -- not your whole bank account.
3. Prepaid Anonymous atm debit cards are more secure. Because the prepaid anonymous offshore debit card is not tied to your bank account, in the very worst case, if someone steals both your card and PIN, the most that the thief can get is the money that remains on your card. With an onshore bank card, they may be able to drain your entire account.

Q: Where can I get a prepaid anonymous offshore debit card?

A: You can purchase by ordering from Offshore Pro Group secure form, send an email to info@offshore-pro.info with following information:
1. Which product you want?

2. Contact details and shipment address: First name: Last name: Address: City: Province/State: Postal/Zip Code: TEL: EMAIL:

Q: Where can I use my prepaid anonymous offshore debit card?

A: You can use your  prepaid anonymous offshore debit card for withdrawals anywhere that you see the Cirrus or Maestro logos, which includes most ATMs worldwide and for POS purchases.

Q: Can I use my prepaid anonymous offshore debit card like a credit card to buy things before I add money to the card?

A: No. The reloadable prepaid anonymous offshore debit card is what is known as a "stored value" card. This means that you must first add money to the prepaid anonymous offshore debit card and then spend or withdraw that money from it. You cannot use the card to spend or withdraw more than the amount of money that is stored on it.  You should always have 10 USD to keep the card active.

Q: Do I need a good credit record to get the Prepaid anonymous offshore debit Card?

A: No. Since you cannot spend or withdraw more money than you have added to the prepaid anonymous offshore debit card, the card issuer does not assume any risk and, therefore, is not concerned with your credit rating.

Q: How do I add money to my prepaid anonymous offshore debit Card?

A: International Bank Transfer (Wire, Swift, etc.).

Q: Is my money protected if my prepaid anonymous offshore debit Card is lost or stolen?

A: Yes. Nobody can get at your money without your PIN. If your card is lost or stolen, it can be replaced once we verify that you are the authorized cardholder.

Q: I am looking at this on a friend's computer and I do not have one of my own. Do I need a computer to use the prepaid anonymous offshore debit Card?

A: No. You do not need your own computer to have the Card. You can use the card just like any other bank cards.  You can check your balance by phone.

Q: Are there any limits to how much money I can store on my prepaid anonymous offshore debit card?

A: Loading of cards may be done in any currency, there will be a direct conversion into USD. Cardholders will then withdraw in whichever currency the ATM machine dispenses. Anonymous prepaid atm  debit card features Maximum Balance US $10,000.00 . You are limited to how much you can withdraw. These limits are set by each the Bank or ATM you use. There is card daily secure withdrawal limit of $ 2,000.00.

Q: Why should I trust prepaid anonymous offshore debit cards?

A: The security of your money is of utmost importance for this prepaid anonymous offshore debit card issuer. We take great care to protect it, such as using the highest publicly available level of security on our Web site. Our prepaid anonymous offshore debit card solutions are issued ONLY by Prime banks.

Q: I used the prepaid anonymous offshore debit Card to transfer money to relatives back home. When I want to send more money to them, can I add money to the same card or do I have to get a new card?

A: Yes. You can simply add more money to the same card. They will then have instant access to the cash.

Q: Can our company label cards with our own brand?

A: NO. If you would like to receive this service you should order at least 1000 cards and to use the co-branded card program offer. Terms of this service can be found at www.offshore-pro.info.

Q: If our company uses prepaid anonymous debit Cards to pay employees and independent agents, do they (agents) have to pay for the cards?

A: You are free to distribute cards to your employees and agents at no charge. At your discretion, you may charge a fee to cover the cost of the prepaid anonymous debit cards. (In some jurisdictions, you may not be legally allowed to charge employees for the means that you use to pay them. If you are considering charging employees for cards, we recommend that you seek legal advice before doing so.) You will need to provide Agent’s IDs to receive the prepaid anonymous debit card for each Agent.

Q: Can we use prepaid anonymous debit Cards to pay overseas employees and agents?

A: Yes. Agents and independent contractors can withdraw money worldwide from ATMs in local currency.

Q: What are the advantages of using Prepaid Anonymous Offshore Debit Cards to pay employees and agents?

A: In many cases, particularly when you have overseas employees and agents, prepaid anonymous offshore debit Card can be a less expensive and time-consuming way to pay employees when compared to printing hundreds and sometimes thousands of checks, addressing envelopes, licking stamps and mailing them, or doing expensive wire transfers. In the case of Gift Certificates, retailers can now sell reusable Card as Gift Certificates.

Q: Could I reduce the total cost by agreeing to regular international delivery rather than courier? I am not in a big hurry to receive the prepaid anonymous offshore debit card?

A: Yes, you can. We can send your prepaid anonymous offshore debit card by registered international delivery.

Anonymous Credit Card Is an Anonymous Credit Card Possible?

 It's a dream for us all to make anonymous purchases without having to sacrifice our personal details to merchants, credit card providers and credit agencies. While you can make semi anonymous purchases over the internet using e-currencies and virtual prepaid cards (which give you a number and expiry date but no physical card), it is almost impossible to get a 100% legal anonymous credit card which you can use both online and at a store.

 Anonymous Private Credit Cards and Private Bank Accounts

 Private credit cards are ideal for those looking to make anonymous purchases, because they can be funded by an private bank account shielded by bank secrecy. Since it is by definition hard to track the holder of an anonymous private credit card, these do not actually offer a line of credit. Instead they come in the form of secured cards, debit cards or prepaid cards which offer the same privileges as the major credit cards like MasterCard and Visa. Prepaid cards are often the most private since they are not necessarily linked to any particular private bank account. Furthermore these types of cards will offer more privacy since you will have to provide no details of your credit history for the bank to share around with 3rd parties (this is one area where bank secrecy is routinely broken).

 After 9/11 the regulatory environment has become much stricter making it a lot more difficult to open bank accounts and make purchases completely anonymously, especially when large sums are involved. As a result, you can still get a prepaid private debit card with no identification, but one with low limits. Many stores for example offer their own branded prepay cards which have low limits of 500-1000USD. You can also get similar low-limit prepaid anonymous cards at some banks.

 Almost Anonymous Prepaid Private Credit Card

 If what you are looking for is an private credit card with much higher limits to withdraw large amounts of cash or make larger purchases online or over the counter, you may have to settle for a card that is not 100% anonymous.

 Internationally accepted card brands like MasterCard Visa or Discovery will not permit entirely anonymous use of their cards. In return for a notarized copy of your passport and proof of residence you can get a prepaid visa or prepaid mastercard with high limits and all the benefits of an internationally accepted credit card. Another benefit is peace of mind - you can be safe in the knowledge that your international credit card is protected against fraud. With a completely anonymous card you might just have to accept the loss - after all how can you prove that it is yours?

 

Unembossed and Company Credit Cards

 

There are still ways to make your transactions very hard to trace. One way is to use an un-embossed pre paid card which will display no name on the card itself and not record your name or personal details when the card is swiped. You can fund this card from an private bank account which is itself almost entirely anonymous.

 

Another option is to use a company or business credit card. You can put your company name on the card and again when the card is swiped only the company name is recorded. You can even have a separate address for the private company and use this as the billing address for your online transactions.

METHOD FOR PROVIDING PRE-PAID ANONYMOUS ELECTRONIC DEBIT CARD COMPATIBLE WITH EXISTING NETWORK OF CREDIT CARDS

An issuer of pre-paid electronic debit cards contracts with an issuing bank for a main account compatible with an existing network of credit cards such as MasterCard or Visa, the main account being divided into sub-accounts. Upon pre-payment by a customer, the issuer issues to the customer a pre-paid electronic debit card, bearing the name of the issuer, for accessing one of the sub-accounts. The card can be issued in purely electronic form and is usable for electronic commerce as though it were the corresponding type of credit card. Purchases are billed to the main account. The customer can receive the card for personal use or send it to a third party, either as a gift or as payment for a purchase.

1. A method for providing an electronic debit card which is compatible with an existing network of credit cards, the method comprising: (a) providing, through a financial institution which participates in the existing network of credit cards, a main account divided into a plurality of sub-accounts, purchases made on each of the plurality of sub-accounts being payable out of the main account through the existing network of credit cards; (b) receiving a pre-payment from a customer; (c) providing one of the plurality of sub-accounts with a credit balance not exceeding the amount of the pre-payment to form a pre-paid sub-account; and (d) making the pre-paid sub-account available to a user who is one of (i) the customer and (ii) a third party designated by the customer by issuing the electronic debit card to access the pre-paid sub-account.

2. The method of claim 1, wherein step (b) is performed over the Internet.

3. The method of claim 1, wherein step (d) comprises providing the user with a notification over the Internet of a card number and expiration date of the electronic debit card.

4. The method of claim 1, wherein step (d) comprises issuing the electronic debit card in a name other than a name of the user.

5. The method of claim 1, wherein step (d) comprises permitting the customer to choose whether records of purchases made on the electronic debit card shall be associated with the pre-paid sub-account or solely with the main account.

6. The method of claim 1, further comprising: (e) receiving a query from the user of an outstanding balance on the electronic debit card; and (f) reporting the outstanding balance to the user in accordance with the query.

7. The method of claim 6, further comprising: (g) receiving an additional pre-payment and a command to roll over the outstanding balance; and (h) issuing an additional electronic debit card having a credit balance not greater than the sum of the outstanding balance and the additional pre-payment.

8. The method of claim 1, wherein step (b) comprises deducting the pre-payment from a pre-payment account maintained by the customer.

9. The method of claim 8, further comprising: (i) receiving a command from the customer to redeem an outstanding balance on the electronic debit card; and (j) depositing the outstanding balance into the pre-payment account in accordance with the command received in step (i).

10. The method of claim 1, wherein the electronic debit card is issued to the third party, and wherein step (d) comprises: (A) receiving from the customer a command to restrict use of the electronic debit card by merchant, by type of merchandise or both; and (B) issuing the electronic debit card so as to be payable only in accordance with the command.

11. A method for obtaining an electronic debit card which is compatible with an existing network of credit cards, the method comprising: (a) making a pre-payment into a sub-account which is one of a plurality of sub-accounts into which a main account is divided, purchases on each of the plurality of sub-accounts being payable out of the main account through the existing network of credit cards, to form a pre-paid sub-account; (b) causing the electronic debit card to be issued to a user to access the pre-paid sub-account.

12. The method of claim 11, wherein step (a) is performed over the Internet.

13. The method of claim 11, wherein step (b) comprises providing the user with a notification over the Internet of a card number and expiration date of the electronic debit card.

14. The method of claim 11, wherein step (b) comprises issuing the electronic debit card in a name other than a name of the user.

15. The method of claim 11, wherein step (b) comprises choosing whether records of purchases made on the electronic debit card shall be associated with the pre-paid sub-account or solely with the main account.

16. The method of claim 11, further comprising: (c) making a query of an outstanding balance on the electronic debit card; and (d) receiving a report of the outstanding balance in accordance with the query.

17. The method of claim 16, further comprising: (e) making an additional pre-payment and a command to roll over the outstanding balance; and (f) receiving an additional electronic debit card having a credit balance not greater than the sum of the outstanding balance and the additional pre-payment.

18. The method of claim 11, wherein step (a) comprises: (A) maintaining a pre-payment account; and (B) causing the pre-payment to be deducted from the pre-payment account.

19. The method of claim 18, further comprising: (g) issuing a command to redeem an outstanding balance on the electronic debit card; and (h) receiving the outstanding balance into the pre-payment account in accordance with the command received in step (g).

20. The method of claim 11, wherein the user is a person different from a person who makes the pre-payment in step (a), and wherein step (b) comprises: (A) issuing a command to restrict use of the electronic debit card by merchant, by type of merchandise or both; and (B) causing the electronic debit card to be issued so as to be payable only in accordance with the command.

21. A system for providing an electronic debit card which is compatible with an existing network of credit cards, the method comprising: (a) an issuing bank facility for providing, through a financial institution which participates in the existing network of credit cards, a main account divided into a plurality of sub-accounts, purchases made on each of the plurality of sub-accounts being payable out of the main account through the existing network of credit cards; and (b) an issuer facility, in communication with the issuing bank facility and with a customer, for receiving a pre-payment from the customer, providing one of the plurality of sub-accounts with a credit balance not exceeding the amount of the pre-payment to form a pre-paid sub-account, and making the pre-paid sub-account available to a user who is one of (i) the customer and (ii) a third party designated by the customer by issuing the electronic debit card to access the pre-paid sub-account.

22. The system of claim 21, wherein the issuer facility receives the pre-payment over the Internet.

23. The system of claim 21, wherein the issuer facility provides the user with a notification over the Internet of a card number and expiration date of the electronic debit card.

24. The system of claim 21, wherein the issuer facility issues the electronic debit card in a name other than a name of the user.

25. The system of claim 21, wherein the issuer facility permits the customer to choose whether records of purchases made on the electronic debit card shall be associated with the pre-paid sub-account or solely with the main account.

26. The system of claim 21, wherein the issuing facility receives a query from the user of an outstanding balance on the electronic debit card and reports the outstanding balance to the user in accordance with the query.

27. The system of claim 26, wherein the issuing facility receives an additional pre-payment and a command to roll over the outstanding balance and issues an additional electronic debit card having a credit balance not greater than the sum of the outstanding balance and the additional pre-payment.

28. The system of claim 21, wherein the pre-payment is deducted from a pre-payment account maintained by the customer.

29. The system of claim 28, wherein, when the customer issues a command to the issuing facility to redeem an outstanding balance on the electronic debit card, the issuing facility deposits the outstanding balance into the pre-payment account in accordance with the command.

30. The system of claim 21, wherein the electronic debit card is issued to the third party, and when the customer issues a command to restrict use of the electronic debit card by merchant, by type of merchandise or both, the issuing facility issues the electronic debit card so as to be payable only in accordance with the command.

Description:

BACKGROUND OF THE INVENTION

[0001] The present invention is directed to a method for providing anonymous, widely accepted electronic money for electronic commerce.

[0002] As electronic commerce, or e-commerce, has grown, so have concerns about paying for online purchases. Such concerns stem from the absence of a way to use cash in cyberspace.

[0003] For purchases from an online merchant, the usual form of payment is a major credit card such as MasterCard, Visa, American Express or Discover. The buyer provides the merchant with the card number, expiration date and name on the card through a secure server. However, many potential buyers are concerned about the potential for fraud through theft of that information. Also, buyers of “adult” merchandise often wish to buy anonymously; credit cards, unlike cash, do not offer that option.

[0004] In addition, persons who lack credit cards cannot do business with online merchants at all, regardless of whether they have enough cash on hand for any particular purchase. Many persons cannot qualify for credit cards; examples include minors, persons with insufficient annual incomes, and persons with bad credit or no credit. Others choose not to use credit cards because of concerns over financial discipline.

[0005] An online merchant can arrange with an Internet service provider (ISP) to use that ISP's billing mechanism to pay for purchases. However, such billing works only when the merchant and the buyer use the same ISP and is therefore impractical in the currently fragmented market for ISP's.

[0006] In online auction houses such as eBay, individuals buy from one another, and any two individuals generally make only one transaction between them. Most individual sellers are not set up to take credit cards. Even if they were, the benefits of using credit cards for such purchases (often only $5-10 per purchase) would not be worth the processing fees, and many buyers would be leery of providing such sensitive information to complete strangers. Therefore, the most common forms of payment are money orders or cashiers' checks and personal checks. Obtaining a money order or cashier's check is inconvenient and costly, while the use of a personal check requires the seller to wait for the check to clear.

[0007] It is known in the art to provide escrow accounts for individuals wishing to do business with one another in online auction houses. However, the use of such accounts imposes its own transaction costs. Moreover, the buyer and seller must subscribe to the same provider of such accounts. Furthermore, when the payment is released to the seller, the seller must still wait for a check to arrive by mail.

[0008] In an attempt to overcome the above-noted difficulties, various proposals have been made for electronic cash. The proposals fall into three categories: proprietary pre-paid accounts, billing by IP (Internet protocol) number and smart cards. None have enjoyed much success.

[0009] Using a proprietary pre-paid account, a user can access the account with a PIN and spend money from the account at any participating online merchant. However, such an account cannot succeed without a large base of merchants participating with any particular provider of the account.

[0010] Billing by IP number seeks to expand the above-noted technique of using an ISP's billing system to situations in which the merchant and the buyer use different ISP's. The merchant recognizes the buyer's ISP by the buyer's IP number and charges the purchase to the buyer's account with that ISP. However, the ISP's used by the merchant and the buyer must subscribe to the same service. Also, the use of the IP number offers openings for fraud and abuse and does not overcome the issue of anonymity.

[0011] A user with a smart card can fill the smart card with a desired amount of money and use the card to spend that money at participating merchants. While losses due to fraud are limited to the amount on the card, the merchants must still be set up to accept the smart card, and the card requires a special reader attached to the computer.

SUMMARY OF THE INVENTION

[0012] It will be readily apparent from the above discussion that a need exists in the art for an online payment system which brings the conveniences of cash in terms of wide acceptance, wide availability, anonymity, utility for small purchases and limited susceptibility to fraud to e-commerce.

[0013] It is therefore an object of the present invention to provide a type of electronic cash which uses existing payment infrastructures rather than a proprietary payment system or a separate billing contract with each ISP.

[0014] It is a further object of the invention to provide a type of electronic cash for persons who, for whatever reasons, do not have credit cards.

[0015] It is a still further object of the invention to provide a type of electronic cash which can be used anonymously.

[0016] It is another object of the invention to provide a type of electronic cash which can be used for small purchases, particularly between individuals.

[0017] It is yet another object of the invention to provide a type of electronic cash whose susceptibility to fraud is limited to an amount predetermined by the user.

[0018] To achieve the above and other objects, the present invention is directed to the issuance of pre-paid, anonymous debit cards usable with an established network of credit cards, e.g., MasterCard or Visa. The issuer contracts with a card-issuing bank to provide a main account divided into multiple sub-accounts. When a user wants a card, the user prepays the issuer, which provides the user with a card on one of the sub-accounts. The card has a positive balance equal to the amount which the user has pre-paid to the issuer, minus a service charge.

[0019] If the card is to be used for online purchases, it can be issued instantly simply by generating a number and providing the number to the user in a sufficiently secure manner. Since online merchants never see a physical credit card, no such physical card is needed.

[0020] The issued card bears the name of the issuer and is therefore anonymous as far as the user is concerned, while satisfying merchant banks' requirement for a name on the card. Also, for further privacy, the user can elect to have purchases disassociated with the sub-account and associated only with the main account. Since merchants are paid out of the main account, such disassociation is of no concern either to merchants or to the card-issuing bank.

[0021] However, if the user so elects, the user runs risks such as loss of the value on the card if the card itself is lost and inability to dispute purchases with merchants. Whether such risks are acceptable is, of course, a decision for each user.

[0022] If a thief obtains the card number, the thief can use the card only to the value which the user has placed on the card. Therefore, the user can predetermine the maximum fraud loss.

[0023] In an electronic auction house, the buyer can pay the seller by causing such a card to be issued to the seller. The seller can then either redeem the value of the card at a financial institution honoring that type of card or use it to make purchases online.

[0024] The card can also be given as a gift. The giver can elect to give a card which is usable at any online merchant which accepts the corresponding type of credit card or to restrict the card to certain online merchants or to certain types of goods. The giver can also elect to have the card restricted in other ways, e.g., by obtaining a card which cannot be cashed in. Such restrictions are especially useful if the recipient is a minor.

[0025] Throughout the present disclosure, the word “customer” will refer to the purchaser of the electronic debit card. The word “holder” will refer to a person holding the card and may be the customer or a person to whom the customer has given the card, either as a gift or in payment for a purchase.

BRIEF DESCRIPTION OF THE DRAWINGS

[0026] A preferred embodiment of the present invention will be set forth in detail with reference to the drawings, in which:

[0027] FIG. 1 shows an overview of the interactions among four entities involved with the electronic debit card according to the preferred embodiment;

[0028] FIG. 2 shows a Web page for purchasing an electronic debit card for one's self;

[0029] FIG. 3 shows a Web page in which the electronic debit card is provided to the customer;

[0030] FIG. 4 shows a Web page for purchasing an electronic debit card for another;

[0031] FIG. 5 shows a Web page in which the electronic debit card is provided to the recipient;

[0032] FIG. 6 shows a Web page for checking a balance and a purchase history for an electronic debit card;

[0033] FIG. 7 shows a Web page for choosing whether to roll over or redeem an electronic debit card;

[0034] FIG. 8 shows a Web page for rolling over an electronic debit card;

[0035] FIG. 9 shows a Web page for redeeming an electronic debit card; and

[0036] FIG. 10 shows a hardware setup for issuing, maintaining and using the electronic debit card.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

[0037] A preferred embodiment of the present invention will now be set forth in detail with reference to the drawings, in which like reference numerals identify like components or operational steps throughout.

[0038] FIG. 1 shows an overview of the interactions among four entities involved with the electronic cash according to the preferred embodiment: the customer 101 , the issuer 103 , the issuing bank 105 and the merchant 107 . The issuing bank is a bank or other financial institution which participates in an existing network of credit cards such as MasterCard or Visa. The issuer of the electronic cash contracts with the issuing bank for an account. The loot issuing bank provides a main account whose terms are between the issuer and the issuing bank. The main account is divided into sub-accounts which the issuer is free to reissue, although the issuer is ultimately responsible to the issuing bank for their use. The main account and the sub-accounts are all issued in the name of the issuer.

[0039] The customer requests an electronic debit card from the issuer and pays the issuer for the card (for example, $80 for a card having a pre-paid value of $75 with a $5 service charge). The issuer allocates a sub-account to the customer and issues a card having the $75 pre-paid value and bearing the name of the issuer. The customer acknowledges receipt of the card, upon which the card becomes active. The last-named step is similar to the acknowledgment and activation of conventional credit cards sent through the mail. The customer is then free to use the card at the merchant. The customer pays for the merchant by providing the merchant with the card number, the expiration date and the name on the card. The merchant delivers the purchase to the customer, e.g., by shipping a physical item, permitting a download of software or providing a password to access a Web site.

[0040] Since the name on the card is that of the issuer, the customer's purchase is anonymous. Also, since the card cannot be used for a purchase greater than the amount placed on the card (in the present example, $75) minus whatever purchases have already been made on the card, a credit-card thief who intercepts the communication between the customer and the merchant can abuse the card only for a small amount. By contrast, with a conventional credit card, the thief could charge thousands or tens of thousands of dollars to the customer's account.

[0041] The merchant bills the purchase to the issuing bank, which pays the merchant and bills the main account. The process is the same as that for the corresponding type of conventional credit card, thus ensuring wide acceptance for the electronic debit card. The issuer pays the issuing bank's bill with the money paid into the sub-accounts by customers.

[0042] The customer obtains a card from the issuer in the following manner. The customer communicates with the issuer, e.g., by accessing the issuer's Web site, and is presented with a page 200 such as that shown in FIG. 2 . The page 200 includes a text box 202 into which the customer types the amount to be placed on the card and radio buttons 204 to select how the card is to be paid for. The card may be paid for by credit card or ATM/debit card, in which case the customer will be prompted for further information. Paying by credit card or ATM/debit card does not defeat the anti-fraud feature noted above, since the electronic debit card to be issued is not automatically refilled once its value is depleted. In fact, the information about the credit or ATM/debit card used to pay for the electronic debit card can be erased from the system once the electronic debit card is issued. The customer can also establish a pre-payment account with the issuer, which is separate from the main account between the issuer and the issuing bank. If so, the customer can instruct the issuer to debit whatever amount is due from that pre-payment account. Whatever payment option is selected, the customer clicks on the “Continue” button 206 or the “Clear” button 208 .

[0043] Once the customer has proceeded as just described and entered all pertinent payment information, the customer sees a page 300 such as that shown in FIG. 3 . The upper portion of the page 300 includes a representation 302 of the electronic debit card. The representation 302 includes a date of issuance 304 , an amount 306 , the issuer's name 308 , the card number 310 , the expiration date 312 and the logo 314 of the issuing bank. The lower portion includes an activation area 316 having two check boxes 318 and 320 . The first check box 318 gives the customer the option of releasing, or disassociating, the name of the customer and the issued card number. With that option, records on purchases made with the electronic debit card reflect only the issuer's identity, not the customer's. As far as the merchant or the issuing bank is concerned, the customer does not exist. Thus, anonymity is assured. The down side is that the customer cannot contest transactions made with the card or retrieve the value of a lost card. The customer checks the second check box 320 to confirm receipt of the electronic debit card and thereby to activate it.

[0044] The customer uses the electronic debit card in the following manner. The customer prints the page 300 or otherwise retains a record of the representation 302 and keeps the record in a safe place. When a merchant prompts the customer for credit-card information, the customer enters the number 310 as the card number, the expiration date 312 as the card expiration date and the issuer's name 308 as the cardholder's name. A physical card is not 15 t normally issued, since the existence or nonexistence of such a physical card is irrelevant to online merchants. However, for an additional charge, the issuer could issue such a physical card to the customer. As described above, the merchant processes the transaction and bills the issuing bank as though the electronic debit card were any other kind of credit or debit card.

[0045] The customer can alternatively elect to have an electronic debit card e-mailed to someone else. Two reasons to do so are to pay another individual for a purchase made through an online auction house and to give the value on the electronic debit card as a gift.

[0046] To send a card, the customer accesses the issuer's Web site and follows a link to a page 400 such as that shown in FIG. 4 . The page 400 is like the page 200 of FIG. 2 , except with the following additions. The customer enters the recipient's e-mail address into a text box 402 . If the card is to be personalized, the customer checks a check box 404 and enters a message into a text box 406 . The message can be a greeting for a gift certificate or can identify the item purchased in an online auction. The customer is also offered the option of restricting the use of the card through a pair of radio buttons 408 . The “No” button is selected by default, in which case the recipient can use the card at any merchant which accepts the corresponding type of credit card or simply redeem the value on the card. If the customer selects “Yes,” the customer can select acceptable merchants through a scroll box 410 , acceptable categories of items to be purchased through a scroll box 412 or both. A card thus restricted is usable only in accordance with the restrictions and cannot be redeemed or rolled over for its value.

[0047] The recipient can retrieve the card in any of several ways which will be readily apparent to those skilled in the art who have reviewed the present disclosure. One such way will now be set forth. The issuer sends the recipient an e-mail message such as the following:

[0048] “Dear LittleEva@some-isp.net: You have been sent an electronic debit card for $75.00 from JoeBob@another-isp.com. To access it, please go to the following URL . . . ”

[0049] When the recipient follows the link, the recipient sees a page 500 such as that shown in FIG. 5 . The page 500 shows a representation of an electronic debit card similar to that of FIG. 3 , with the following differences. The name 502 on the card can optionally be different from the name 308 in FIG. 3 . The personalized message typed into the text box 406 appears at 504 . If the card is restricted, a code or codes 506 identify the restriction. The recipient can be provided with a list of codes to determine where the card is valid.

[0050] The holder can access the issuer's Web site and check the present balance or the purchase history through a page 600 such as that shown in FIG. 6 . The holder enters the card number into a text box 602 and clicks on a button 604 to check the present balance or a button 606 to check the purchase history. If the customer when purchasing the card elected to release the name, the button 606 will return an error message stating so.

[0051] Clicking on the button 604 results in a page 700 such as that shown in FIG. 7 . The page 700 includes a message stating the current balance on the card and the expiration date. The holder is given the option of rolling the balance over to a new card by clicking on a button 704 or redeeming the balance by clicking on a button 706 .

[0052] Any electronic debit card, except those which have been restricted, can be redeemed or cashed in, or can be rolled over onto another card. The holder may wish to do so when the card is about to expire or when the card has too little value left on it to do anything useful.

[0053] Clicking on the button 704 results in a page 800 such as that shown in FIG. 8 . The page 800 is like the page 200 of FIG. 2 , except that a text box 802 prompts for an amount to be added to the card. The process is similar to that for rolling over value on fare cards in some transit systems.

[0054] Clicking on the button 806 results in a page 900 such as that shown in FIG. 9 . The holder, if a customer with an account, can click on a button 902 to credit the amount on the card to the account.

[0055] The electronic debit card is issued, maintained and used in a hardware setup such as that shown in FIG. 10 . The customer uses a microcomputer 1002 or other device for accessing the Internet 1004 . The issuer maintains an issuer facility 1006 which communicates with the customer through a Web server 1008 connected to the Internet 1004 . The issuer facility 1006 accepts the pre-payment from the customer, maintains the customer's pre-payment account if any and allocates a sub-account and an associated card number. The Web server 1008 generates whatever Web pages are needed to communicate with the customer to accomplish those tasks, including the Web pages of FIGS. 2 - 9 .

[0056] The issuer facility 1006 communicates with an issuing bank facility 1010 over a dedicated line or the like. The issuing bank facility 1010 includes a database 1012 for maintaining account information on the main account and on each sub-account in accordance with information received from the issuer facility 1006 and transaction information received from merchants. The issuing bank facility 1010 is similar to existing computer facilities used by banks for maintaining account information on credit cards and clearing transactions made with those credit cards, but has the additional ability to maintain whatever information on each sub-account is required to clear transactions made on the corresponding electronic debit card. Also, when the issuer facility 1006 receives a balance query from the customer, the issuer facility 1006 can pass the query to the issuing bank facility 1010 , which sends information on the account balance back to the issuer facility 1006 .

[0057] The issuing bank facility 1010 communicates with merchants 1014 to clear the transactions. Each merchant has some ability to receive card information from buyers, such as a secure socket layer (SSL) server 1016 . The merchant communicates with the customer's computer 1002 over the Internet 1004 . Communications between the merchant 1014 and both the issuing bank facility 1010 and the customer's computer 1002 can be accomplished in ways known in the art of credit-card processing. Of course, the communication between the merchant 1014 and the issuing bank facility 1010 could be accomplished indirectly, e.g., through the merchant's bank.

[0058] Security features can be added. For example, the customer, when purchasing the card, can elect to have a PIN associated with the card. Similarly, a card sent to a recipient can have a PIN associated with it so that the recipient can activate the card only with the PIN. Such a feature can be useful, e.g., if the card is to be used in place of an escrow account; in that case, the customer can instruct the issuer to send the PIN upon approval, or the issuer can send the PIN automatically if the customer lets the approval period lapse.

[0059] While a preferred embodiment of the present invention has been set forth in detail above, those skilled in the art who have reviewed the present disclosure will readily appreciate that other embodiments can be realized within the scope of the present invention. For example, the functions of the issuer and the issuing bank can be performed by a single entity. Also, the customer can buy the electronic debit card with a check, in which case the issuer notifies the customer that the card has been issued in a manner similar to notification of the gift card. Therefore, the present invention should be construed as limited only by the appended claims.