U.S. VISA gift cards and usage in Europe; technical and/or legislative insight?

Question

Can you use any U.S. gift card anywhere in the world to pay at a counter with a VISA logo?

I read on some web sites that U.S. gift cards don't work in Europe, but no reason was given, others were talking about 7% fees.

Does the VISA logo not guarantee that a payment will work? What exactly happens behind the scenes when the card is swiped? The credit card data and purchase sum gets transmitted to the issuing bank (routed through some central VISA system to identify the right bank by the card number?), the balance gets checked, and reduced, and then the cash desk gets confirmation that everything went smooth?

How can this process be blocked for certain shop & issuer combinations? Or is there some law in Europe not allowing anonymous credit cards, and the VISA or bank server tells the cash desk that this card is not usable?

Are conversion fees bank-dependent?

Answer 1

The gift card is just like a Debit Card and most of the rules will be same as a Debit Card.

If a gift card is issued only for Domestic use, then it cannot be used outside.

If not it can be used outside of US as well.

Quite a few countries in the Europe have adopted a CHIP & PIN based card, hence your card may not work there. In some countries there are separate Credit Card & Debit Card networks, the debit card network require you to authenticate using a PIN that if not available with the gift card, then you may have to ask him to swipe on the credit card network.

There are multiple ways in which a card payment is blocked at the bank's ends. It can be for a variety of combinations.

Answer 2

VISA logo guarantees that the cards will be accepted everywhere VISA is accepted (although in some countries local issuers put "Valid only in XXX" on their cards occasionally, it doesn't technically prevent from using it in a different place).

Fees and charges however, are per issuer, and it is very likely that the prepaid gift cards will be hit with high foreign transaction fees and unfavorable exchange rates. Why? Because they can.

Technically prepaid gift cards can be blocked if illegal, because the type of the card is encoded in the card number, but I doubt if it is done. I had used a prepaid Mastercard I got from the US in Europe, without an issue (it was denominated in GBP and I used it in the UK, so may be its not the right analogy). There's no difference between Mastercard and Visa, with regards to the legal issues.