Can you block prepaid debit cards? Yes. I regularly talk with merchants requesting a way to block prepaid debit cards, especially for installment payments. I recently discovered I’ve been lax with my terminology though. A stored-value card is usually anonymous and there is no record of who the card belongs to or who loaded money onto it; the traditional gift card. Prepaid debit cards are usually issued in the name of individual account holders and there are records of deposits. A prepaid debit card is frequently used by students and may also have rewards programs tied to them.
In either case, they both cause problems for the merchant who has a recurring billing or an installment purchase option when there is no money left on the account and the customer already has the goods or services. One merchant told me customers will give a credit card for the down payment, but then ask to use a different card for the recurring billing. The first one will work, but the second is a prepaid or stored value card and there won’t be any money on it when it comes time to charge the account. By the time they discover there is a problem, months have passed.
The solution is to identify the card before it hits your processor. For example, if your customer opts for 3 installment payments, when you enter the card information, it is immediately validated. If you have elected to block non-credit cards for installment payments, the card will not be accepted.