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PayPal accepts prepaid gift cards in time for holidays

The company has created a patent-pending technology to accept prepaid cards on PayPal-compatible sites.


PayPal is trying to make it easier for consumers to buy products online with prepaid gift cards.

The company on Tuesday announced that consumers who buy products on sites that accept PayPal can use their prepaid credit cards to complete their purchases. PayPal Product Manager Ed Lee said in a blog post on Tuesday that the company discovered many consumers had a hard time redeeming prepaid gift cards on e-retail sites, prompting PayPal to find a solution.

PayPal didn't say how it was able to arrive at its solution, indicating only that it has "discovered a patent-pending and innovative way to allow the usage of prepaid gift cards so that you can seamlessly apply them to the purchase of products and services anywhere PayPal is accepted."

Prepaid gift cards are increasingly popular. Many of them come from major credit card vendors, like American Express and Visa. However, online retailers often make consumers jump through hoops to redeem them. PayPal claims its technology resolves that issue.

PayPal's support for prepaid gift cards launches now. There are no details on whether the new functionality works with gift cards issued by non-US retailers.