Prepaid Debit Cards, a Banking Solution without a Bank Account



It has long been a challenge for Ugandans without bank accounts to transact online and also those that do travel aboard have faced several risks related with carrying cash. The process of acquiring and maintaining a bank account has for long had little attraction to many average Ugandans.  With so much lacking in the Uganda banking sector, Mobile Money has come and has been embraced pretty fast.  Banks have been challenged to come up with solutions that cater for the unbanked.  Prepaid Debit Cards are here as one of the solutions. Though the idea of Prepaid Debit Cards is not founded in Uganda, United Bank of Africa (UBA) Uganda is one of the banks that have brought Prepaid Debit Cards.

In the USA, the primary market for prepaid debit cards are unbanked people who typically may have poor credit ratings, who do not use banks or credit unions for their financial transactions or people that are not yet permitted to transact with credit cards such as those less that 18yrs.

In Uganda, it is less a question of credit standing but a question of a big number of unbanked population which at one time or the other would need the service of a VISA branded card to transact online or as they travel.

The advantages of prepaid debit cards include being safer than carrying cash, worldwide functionality due to Visa and MasterCard merchant acceptance, not having to worry about paying some bank account charges, the ability for anyone over the age of 18 to apply and be accepted without regard to credit quality and the ability to directly deposit paychecks and government benefits onto the card for a free.

It is been typical in our largely cash economy that for someone to pay you with a cheque you will have the burden of opening a bank account. This will change with prepaid debit cards. All you need is go to the bank with the cheque, arrange this card and your money will be deposited on this card. For several months after your cheque is cashed through your prepaid debit card, you possibly may not need to use the card and won’t be burdened with some charges such as the monthly bank account charges.

The cards such as what UBA is offering typically come with features such as ability to Purchase at Point of Sell, Purchase on WEB, ATM Cash withdrawal and Point of Sale cash Advance.

Despite of the seaming ease to get and use the prepaid debit cards, there still will be some bank charges which a customer will have to weigh with what they need the card for in comparison to the charges of maintaining a bank account.