Prepaid cards have taken on a central role in digital payments in Italy. An increasing number of customers are choosing to pay with prepaid cards for online and in-store purchases. Doing so can help them manage their budgets more easily. If you have a business, accepting prepaid cards for online payments can help expand your customer base. It is a secure, flexible payment method that is particularly popular with younger people and those who do not have traditional credit cards.

In this article, we explain how prepaid cards work, their benefits for customers and businesses, their differences from credit cards, and some simple and secure ways to pay online with a prepaid card. We also explain why more and more businesses have decided to integrate prepaid cards into their payment systems.

What’s in this article?

• How prepaid cards work online and in stores
  
• Benefits for Italian businesses that accept prepaid cards
  
• How prepaid card payments work
  
• Security features and benefits of prepaid cards
  
• Key differences between prepaid cards and credit cards
  
• How to use prepaid cards for online transactions
  
• How Stripe Payments can help
  

How prepaid cards work online and in stores

A prepaid payment card allows customers to make transactions within the limit of the money loaded onto it. Unlike a credit card, it does not involve access to a line of credit. Instead, it works on an “available balance” basis: the holder can only spend what they have loaded onto the card.

Prepaid cards have become particularly popular in Italy. According to an analysis by Osservatorio Visa Italia and Ipsos, 41% of Italians regularly use prepaid cards to purchase goods and services. This is up from 31% in 2021. Prepaid cards rank third after credit cards and payment apps / digital wallets.

Prepaid cards are also widely used for online payments because of their security and ease of use. Some of the most popular ones—such as PostePay or HYPE—also include an International Bank Account Number (IBAN) that allows customers to receive bank transfers or have paychecks credited to their accounts. This feature transforms these prepaid cards into financial management tools.

For online payments with prepaid cards, one important aspect is the perception of greater security. Many customers prefer to use a rechargeable card for online purchases because the fraud risk is limited to the amount loaded on the card. This reduces exposure to potential fraud compared to using a checking account or credit card linked to a larger line of credit.

When shopping in stores, prepaid payment cards work like any other card. Customers can insert them into point-of-sale (POS) terminals or tap them for contactless payments. Customers can also use prepaid cards in the same way as debit or credit cards when shopping online. To make a purchase, they must enter the card number, expiration date, and card verification value (CVV) code.

Benefits for Italian businesses that accept prepaid cards

If you operate a business in Italy or are thinking of starting one, accepting payments with prepaid cards represents an important opportunity—online and offline. By accepting prepaid cards, you are both adding another payment method and responding to a real market need. Millions of Italian customers regularly use prepaid cards for online purchases. They will also expect to be able to use them without barriers on your ecommerce site or in your store.

The key benefits of prepaid cards for businesses include the following:

• Expanded customer base: Many customers—especially young people, students, and those without access to credit—mainly make payments with prepaid cards. If you do not accept this method, you risk excluding a significant portion of potential customers.
  
• Reduced risk of insolvency: Prepaid cards involve advance payments, so they don’t carry a nonrepayment risk. Funds are transferred immediately, also making transactions more secure from the business’s perspective.
  
• Greater perceived security for customers: Those who choose to pay online with a prepaid card do so because they perceive this method as more secure. By offering this option, you can strengthen customer confidence in your brand.
  
• Increased conversions: According to several ecommerce studies—such as the Baymard Institute’s 2025 study on shopping cart abandonment—the absence of a preferred payment method is one of the main causes of cart abandonment. By integrating prepaid cards for online payments, you can help improve order completion rates.
  

How prepaid card payments work

Using prepaid cards is intuitive, and they are designed to ensure ease of use. Shoppers load money in advance and can spend it online or in stores until the available balance is exhausted. Here is a closer look at how it works.

Card reload

Many reload options are available that are suited to different customers:

• Wire transfer: If the card has an IBAN, the customer can transfer funds from a checking account as they would with a wire transfer.
  
• Cash: Some cards can be reloaded with cash at tobacco shops, automated teller machines (ATMs), or participating retailers.
  
• Other cards or apps: Many banks and fintech companies allow customers to top up directly from the app using credit cards, debit cards, or peer-to-peer (P2P) transfers. P2P is a direct money transfer between two people via digital platforms or banking and fintech apps.
  
• Periodic crediting: Some customers receive their salaries directly to the IBAN of their prepaid card, effectively turning it into a simplified checking account.
  

Daily use

Once loaded, customers can use the card in various contexts:

• Online payments: To pay with a prepaid card online, customers can enter the card details (i.e., number, expiration date, and CVV) as they would with credit cards.
  
• In-store payments: Similar to traditional cards, prepaid cards work with POS terminals using chips, personal identification numbers (PINs), and contactless payments.
  
• Cash withdrawals: Almost all prepaid payment cards allow customers to withdraw cash from ATMs in Italy and abroad.
  
• International payments: With Visa or Mastercard networks, customers can also pay abroad with prepaid cards, similar to debit cards.
  

Expenditure control

One of the main reasons customers choose this tool is its ease of monitoring:

• They can check their balances and transactions in real time via an app or home banking.
  
• There is no risk of going into debt because they can only spend what they have loaded on the card.
  
• For young people and children, prepaid cards are also excellent educational tools for learning how to manage money.
  

Additional features

Today, many prepaid cards for online purchases offer extra services:

• Virtual cards for one-time payments
  These cards are generated directly from apps, have different numbers than physical cards, and often expire after a single use. They are especially useful for those who want to use a prepaid card to pay online with complete security. Virtual cards prevent the main card’s details from being compromised in the event of fraud or website hacking.
  
• Real-time push notifications
  Every transaction generates an immediate alert on customers’ smartphones. This allows customers to instantly monitor all expenses—even the smallest ones—and immediately identify suspicious transactions. This feature can reassure customers who want control over their spending.
  
• Advanced management via apps
  Many apps linked to prepaid payment cards allow customers to check their balances and transactions. They also allow customers to block or unblock their cards with a tap, change their PINs, set spending limits, or disable payments abroad. This way, if the customer loses their card or suspects fraudulent use, they can take immediate action without having to wait for customer support.
  

How do prepaid card payments work?

Paying with a prepaid card works just like a regular debit or credit card. First, the customer loads the desired amount onto the card. Then, they can use it for online or in-store purchases by entering the card details or tapping it on a POS terminal. Customers can only spend what they have loaded on the card without the risk of going into debt.

When are prepaid card payments charged?

Prepaid card payments are charged at the time of the transaction. The amount is deducted immediately from the available balance without having to wait or make installment payments.

Security features and benefits of prepaid cards

Security is one of the main reasons customers prefer to pay online with prepaid cards rather than traditional credit cards.

Key security benefits include the following:

• Limitation of risk: The customer can only spend the money loaded onto the card, reducing losses in the event of fraud.
  
• Virtual cards: Some issuers offer temporary cards for single use, which are ideal for purchases on unfamiliar websites.
  
• Antifraud checks: Transactions often require two-factor authentication, in line with the revised Payment Services Directive (PSD2).
  
• Separation from checking accounts: Using a prepaid card for online purchases means keeping digital payments separate from main accounts.
  

Key differences between prepaid cards and credit cards

To better understand how to pay with prepaid cards online and what advantages they offer, it is useful to compare them directly with credit cards. The key differences include the following:

• Source of funds
  With a prepaid card, the customer can only spend the money they have loaded onto the card in advance. They don’t have access to a line of credit. On the other hand, a credit card allows the customer to make purchases even if the funds are not immediately available. This is because the bank advances the amount, and the customer repays it later.
  
• Spending management and debt risk
  With a prepaid card, the customer cannot go into debt because the system blocks transactions that exceed the available balance. Conversely, credit card expenses accumulate and are charged in a single payment at the end of the month or in installments. If the cardholder does not pay the amount due by the due date, interest and fees will be charged, which can cause the debt to grow rapidly.
  
• Eligibility requirements
  Obtaining a credit card generally requires a credit check, proof of income, and sometimes additional collateral. On the other hand, prepaid cards are accessible to anyone, including students or people without traditional checking accounts.
  
• Target customers
  Credit cards are designed for those who want flexibility in their payments and have the ability to manage future charges. Alternatively, prepaid payment cards are popular with those who want greater control over their spending. They can avoid the risk of debt and separate online payments from their personal finances.
  
• Payment acceptance
  Both cards can be used for online and in-store purchases. However, some reservations (e.g., for car rentals) expressly require a credit card. These transactions allow for the holding of funds for security deposits—a feature not available with prepaid cards.
  

How to use prepaid cards for online transactions

Using a prepaid card for online payments is simple and intuitive. However, knowing the steps in detail can benefit customers and increase the security of transactions.

Here is the typical process:

• Select product or service: Once the customer has chosen what to purchase on an ecommerce site, they go to the shopping cart to start the payment process. Prepaid cards are accepted in the Visa and Mastercard networks just like any other payment card.
  
• Choose payment method: At checkout, the customer will find several options (e.g., card, PayPal, wire transfer). To pay online with a prepaid card, customers must select the “pay by card” or “debit or credit card” option.
  
• Enter card details: To make online purchases, the customer enters their prepaid card details, including the 16-digit card number, expiration date, and CVV security code. Some platforms also allow customers to save their data for future purchases, but it is advisable to do so only on reliable websites.
  
• Complete authentication and security check: The European PSD2 legislation requires Strong Customer Authentication (SCA), so the customer will be asked to confirm the payment with a temporary code received via text message or push notification on the banking app or with biometric recognition. This step adds an extra layer of protection against fraud.
  
• Receive confirmation and receipt: After authorization, the payment is processed in a matter of seconds. The customer receives confirmation on the website and via email. On the app linked to their prepaid card, they will see the immediate charge with the updated balance.
  

In addition to individual payments, many prepaid cards can also be used for the following:

• Subscriptions to online platforms (e.g., streaming, software, digital services) with recurring charges
  
• International payments in foreign currency using the Mastercard or Visa network
  
• Creation of virtual cards to protect data when shopping on unfamiliar websites
  

How Stripe Payments can help

Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.