How To Use Prepaid Debit Cards for Anonymous, Cash-like Digital Transactions

Prepaid debit cards are sold as gift cards at many stores and offered by Visa, Mastercard and American Express. These cards are purchasable with cash, which enables them to be used for anonymous, cash-like digital payments.

Once purchased the cards can be used like normal debit or credit cards, but to be used online, they must be registered on a Website. Purchasing goods with these cards doesn’t make much sense, since any physical item will require a real shipping address, but it’s an attractive option for paying for services. One could use an anonymous debit card to purchase VPN and prepaid cell phone services, both of which will contribute to preserving the privacy of your electronic communications.

When purchasing a prepaid card for anonymous use, it’s important to avoid cards which are reloadable. The reloadable cards usually involve actual credit and, as such, require a social security number to be activated. Non-reloadable cards only require a name and address. This information is never verified. It is only used in Address Verification System checks, which is the system that merchants use to verify that a person using a card to make an online purchase, is in fact the card owner. As long as the name and address you enter while registering the card is the same that you provide the merchant, the AVS check will pass.

Options

Visa, Mastercard, and American Express prepaid cards can be purchased at most grocery and drug stores. These stores will usually have a rack somewhere with a wide selection of store-specific gift cards, for places such as Amazon and iTunes, as well as calling cards, prepaid cell-phone cards and reloadable debit cards. The non-reloadable prepaid cards that you’re looking for will be somewhere on the same rack. They’ll be labeled as gift cards and tend to only be available in fixed amounts.

The nation-wide chain of Simon Malls all offer gift cards that can be purchased in any dollar amount from $20 to $500. You can choose between American Express and Visa cards. These gift cards are no different from the prepaid Visa and American Express cards available at your local grocery store, save for the Simon logo.

Simon claims that American Express cards do not need to be registered for online use. I’ve had trouble with American Express cards, both registered and un-registered and tend to avoid them now. I’ve never had problems with Visa or Mastercard cards at any merchant.

I purchase both types of cards. I’ve always paid with cash and I have never been asked for any identification.

Fees

The Simon gift cards require a $2.95 activation fee at the time of purchase, which is regardless of the value that you place on the card.

The un-branded cards also require an activation fee at the time of purchase. This varies based on the fixed-amount of the card that you’re purchasing. It tends to be somewhere between $3.95 and $6.95. The fees are the same for Visa, Mastercard and American Express.

Some of the cards will expire after a period of years and some of them will have monthly fees deducted for inactivity after the first year. These terms will vary depending on the card that you choose, but they tend to be irrelevant. You are not purchasing the card as a long-term value store. You are purchasing the card to use it and it will likely be depleted within a couple months, at which point you can go buy another one.

Limitations

Prepaid debit cards do have their limitations.

• They cannot be used to withdraw cash at ATMs.
• They cannot be used for subscription services with recurring billing.
• They can only be used with US merchants.

The first limitation doesn’t affect us, since we’re discussing using these cards online. The second limitation may impact your intended use, but despite the card’s claimed limitation, I have successfully used them to pay recurring charges. I imagine that this depends on how the merchant does their billing.

The cards can be used to fund a new PayPal account, which allows us to avoid the final limitation, if the foreign merchant accepts PayPal. You can also sign up for subscriptions with a PayPal account funded by an anonymous debit card to address the second limitation.

Tor

Before they can used online, the anonymous debit cards must be registered so that they are able to pass AVS checks. Registration of the card can be completed anonymously through Tor. Tor is an implementation of onion routing, which is a technique used to anonymize digital communications by bouncing the packets through multiple nodes in the network. Before leaving your computer each packet is encrypted multiple times, such that each node in the Tor network can remove only one layer — like peeling off the outer layer of an onion. This prevents any of the nodes on the network from knowing both the origin and destination of the packet. Every node on the network, with the exception of the final exit node, is also prevented from reading the contents of the packet. If the packet was encrypted before being handed to Tor (such as with common web communications using the TLS/SSL protocol), the exit node will also be unable to read its contents.

The easiest way to use Tor is by downloading the Tor Browser Bundle. This is a version of Mozilla Firefox that has been tweaked for privacy, and communicates solely though Tor. The Tor Browser is available for Linux, OS X and Windows. It is simply a binary that needs to be extracted and run. It doesn’t require installation or any configuration.

Registration

Each prepaid card comes with activation instructions that include the URL of the registration page. After visiting this registration page in the Tor Browser, you’ll be asked to enter a name, address and phone number. Remember that this address will only be used for AVS checks. No other verification will be done. Whatever name and address you use, make a note of it so that you can enter the correct billing information when using the card.

Use

After the card has been registered it’s ready to use. Any online use of the card should also be done through the Tor network to preserve your anonymity. If you decide to use the card with a PayPal account, register a new PayPal account through Tor.

Most online purchases will require an email address. Since you’re already in the Tor Browser, head over to Tor Mail and sign up for a new address to use with the card. If you want a quick disposable email address, try Mailinator.