Stored Value Cards are pre-paid financial instruments used to assist the unbanked communities in America and all over the world. These products were created to provide other alternatives to those who did not want a banking relationship. With several different programs available in the stored value arena, everyone including those who are banked can benefit from stored value pre paid cards.

Stored value cards are one of the most dynamic and fastest growing products in the financial industry. Anyone who makes purchases with a merchant gift card, places phone calls with a prepaid telephone card, or buys goods or services with a prepaid debit card is using a stored value card.

Stored value cards provide a way to make financial transactions. Stored value cards use magnetic stripe technology to store information about funds that have been prepaid to the card. There are two main categories of stored value cards in the marketplace. The first prepaid cards made available to the marketplace were single-purpose or ‘closed-loop’ cards. Gift cards, which can only be used to purchase goods at particular retailers, and prepaid telephone cards, which can only be used to make telephone calls, are examples of single-purpose cards. The second type of card to emerge was a multipurpose or ‘open-loop’ card, which can be used to make debit transactions at a wide variety of retail locations, as well as for other purposes, such as receiving direct deposits and withdrawing cash from ATMs. Some multipurpose cards are branded by Visa or MasterCard and can be used wherever those brands are accepted.

Consumers can obtain stored value cards in a variety of ways. They may obtain a payroll card from an employer, an electronic benefit card from a government agency, or a gift card from a retail store. Typically, a consumer would apply for a general spending multipurpose card by telephone or online, although these cards may be increasingly offered at check-cashing outlets, money transfer company locations, and retail stores.
The stored value card market is growing and evolving rapidly. According to industry estimates, more than 2,000-stored value programs are available, with roughly 7 million Visa or MasterCard branded stored value cards in the marketplace. There are approximately 20 million users and that figure is expected to more than double to 49 million users by 2008. In 2003, stored value cards were used to make $42 billion in transactions. By 2006 over $72 billion in stored value transactions are expected. Experts put this industry in the introductory or early growth stage of the product life cycle, suggesting that there is substantial growth potential in the years ahead. These industry figures include all stored value cards, such as multipurpose general spending cards, payroll cards, government benefit cards, child support payment cards, merchant gift cards, and telephone cards.
Reloadable multipurpose cards are often viewed as alternatives to checking accounts. Among stored value cards, reloadable multipurpose cards most closely resemble traditional deposit account debit cards in functionality and are thus most likely to meet the needs of the unbanked or under banked. Consumers not only can use these cards to make payments to a wide variety of merchants and service providers but also can reload them with additional funds. The ways in which cards can be reloaded vary but may include direct deposit, money wire transfer, money order, or cash presentment at designated retail locations such as convenience stores.