It is not possible, as of 2011, to fund a prepaid debit card using a paper check deposited into an ATM. Prepaid debit cards are not linked to traditional banks and credit unions --- or their ATM networks. That means a person wanting to place funds from a paper check onto a prepaid card must first cash the check, and then deposit proceeds onto the prepaid card.
Merchants selling prepaid debit cards usually accept deposits to the cards at cash registers. Some of the retailers also cash paper checks for a fee, making it simple to complete the entire process during a single visit. However, there often are restrictions on the type of check the merchants will cash. Usually, payroll checks and government checks such as Social Security payments are not a problem. However, merchants may decline to cash a personal check. In those situations, the person holding the check should take it to the bank listed on the check, if possible, and cash it there with proper identification. It is possible with some prepaid debit cards to deposit a payroll or government check directly into a prepaid debit card account. Prepaid debit card owners seeking that option must take checks to merchants accepting deposits for certain prepaid debit cards.
People using prepaid debit cards to manage their finances may opt not to accept personal checks for goods, services or other reasons. Instead, the owner of the prepaid debit card can ask for a wire transfer directly to the card. Most prepaid debit cards offer bank routing numbers and account numbers for direct deposit. Money transfer companies, such as those often found in grocery stores and others, can wire money directly to any legitimate bank account.
Personal checks and some payroll checks are problematic for prepaid debit card companies, because of the questionable legitimacy of some personal checks. Without controls in place, some people desperate for cash could deposit fraudulent personal checks on their prepaid debit cards, and then quickly withdraw cash.
People choose to use prepaid debit cards for a variety of reasons, including a desire to avoid fees associated with traditional checking accounts. However, it is helpful to maintain at least a savings account with a bank or credit union. Placing a personal check into a savings account may result in a waiting period for availability of the funds, but it is an option. Once funds clear, the account holder can withdraw cash to place onto a prepaid debit card. However, the bank or credit union may charge fees for excessive withdrawals from a savings account.