Prepaid Payments
Prepaid payments refer to a financial model where users pay in advance for goods or services, storing value in an account or on a card for future use. This concept is widely used in digital wallets, gift cards, mobile top-ups, and subscription services to manage cash flow and reduce payment risks. It enables businesses to secure revenue upfront while providing customers with convenient, controlled spending options.
Developers should learn about prepaid payments when building e-commerce platforms, fintech applications, or subscription-based services to implement secure payment processing and user account management. It's essential for handling scenarios like digital wallets (e.g., PayPal balances), gift card systems, or prepaid mobile plans, where tracking balances and preventing overspending are critical. Understanding this concept helps in designing systems that comply with financial regulations and enhance user trust through transparent fund handling.