Pre-paid cards to be launched by Mastercard

MasterCard Europe and Advanced Payment Solutions (APS) are launching a payment card in the UK, which will help people who are unable to secure credit. The launch is scheduled for 21 September.

The card will work in a similar way to pre-paid mobile phones. Holders will charge up the card with money before they use it. They will then be able to use the card for cash withdrawals and to purchase goods and services, both online and in High Street stores.

The card will be targeted at the two million households in Britain that do not have a current account or savings account. According to market analyst Datamonitor, approximately 50% of the UK adult population does not have a credit card.

Pre-paid cards can be used without a bank account, and because they are charged up with funds in advance, the holder will not fall into debt by using the card, or incur interest charges.

Phil Davies, director of business development at MasterCard Europe said: “Fuelling the growth of prepay cards is essential to realising our vision of a truly cashless society”.

Similar cards have already been launched successfully in the US.