Business Definition for: stored-value card
stored-value card
plastic card encoded with monetary value on a magnetic stripe. Stored-value cards are effective replacements for cash and have many applications for low-value retail purchases. There are two main categories: closed-loop cards, such as merchant gift cards, transit system fare cards, and prepaid telephone cards; and open-loop cards, which can be used at many retail merchants and for banking purposes, such as receiving direct deposits or withdrawing cash from automated teller machines. Open-loop cards can be reloaded with additional value. Banks have been offering stored value cards as a gateway to servicing the needs of consumers who have income from wages or benefits but lack access to conventional checking or savings accounts.
See also
check card
,
gift card
,
payrollcard
,
cash card
Related Terms:
Visa or MasterCard debit card that deducts funds from a cardholder's checking account. Check cards are frequently accepted by restaurants and other merchants that also accept Visa or MasterCard credit cards as a replacement for personal checks.
prepaid Visa card, MasterCard, or American Express card that enables the user to purchase goods or services up to the value of the card. Bank-issued gift cards work much like retail merchant gift cards, serving as redeemable gift certificates. Card-issuing financial institutions profit from the float or interest earned from the date of purchase to the transaction date. Banks may treat gift cards like credit card cash advances by charging users transaction fees.
bank card that accesses an employee's salary or wages through withdrawals at automated teller machines. Payroll cards are an alternative for people who do not have bank accounts or want to minimize bank service charges.
plastic card encoded with a preset value. Cash cards are like cash; there is no built-in security and if lost or stolen can be used by anyone. Card-accepting retailers deduct the value of each purchase until the card value is used up. Contrast with check card.
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