Kara Gammell writes in today's Telegraph.com.uk about prepaid cards and questions whether or not they would provide more protection than credit or debit cards and entice 50% of the UK population to shop online in an article entitled: "Will Prepaid Cards Keep the Fraudsters at Bay?" 

"More than half of the population are so worried about becoming a victim of fraud that they refuse to shop online. The research, conducted by CyberSource, a company specialising in electronic payments, said that one in three respondents knew someone who had been the victim of fraud.

But for these reluctant shoppers, a prepaid card might just be the answer.

A prepaid card looks just like a normal credit or debit card, and enables you to buy products and services where ever these cards are accepted.

The main difference is that you can only spend the balance that has been preloaded onto it. This means there is no risk of running into debt as it has no credit or overdraft facility and crucially, the card has none of your personal bank details attached to it.

In the beginning prepaid cards were used by parents to manage their children's spending habits and the market has been typically has been dominated by Mastercard and Maestro. But now a number of rival cards have appeared, targeting everyone from overseas travellers, nervous online shoppers to new mothers.

Andrew Hagger, spokesman for Moneynet.co.uk, said: "Prepaid credit cards allow such people to be part of the modern day 'plastic culture' which allows you to take advantage of online shopping discounts as well as access to hugely popular sites such as eBay."

For those shoppers who are hesitant about spending on the web, this type of card could help reduce the potential for fraudsters to steal your personal details.

Mr Harrison said: "The risk with a credit card is that the fraudsters will be able to max out your card, where a prepaid card is almost like a pay-as-you-go mobile phone. The only money that can be stolen, is the money you have loaded on.

"And unlike a debit card, a prepaid card does not have any link to your bank account or address, so the chance of fraud is next to none."

Editor's Note:  The problem the UK is having is with cloning/counterfeit cards.  I would imagine that hackers have their eye on the prepaid market as it is readily more easy to counterfeit $50 cards than $50 bills.

How do prepaid cards work?

Money – typically up to £5,000 – can be loaded on to a prepaid card by cash at a bank, Post Office, at Pay zone or PayPoint terminals, bank transfer, through your employer or even by another credit card.  Editor's Note:  or even by a hacker using a stolen credit/debit card! 

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card cloninig, hacking, prepaid, fraud