Per PayPal's own Help FAQs, they state the following: You can't link a gift card, prepaid card, or one-time-use card to your PayPal account. (We’ve learned the exceptions are, PayPal Products or Green Dot Money Packs or a Prepaid Card that allows you to register both your name and billing address and PayPal can validate that info.)
Suggest not trying to link a prepaid card to your PayPal account unless the card is a PayPal Product or a Green Dot Money Pack or you have contacted the prepaid card issuer and registered both your name and billing address with the card. You can still have issues with a prepaid card if PayPal cannot validate the your name and billing address.
With many prepaid cards, there's no owner name or billing address information nor is there a way to include that information on the card. There’s only the card number and an amount. PayPal can see the amount but, their security checks cannot confirm the card owner as there’s no name or address info. When that happens, you are asked to use another funding source.
If you try link the card, you may have some dollar amount removed however, the linking process will fail. In other cases, you can link the card and may even have a small amount deducted from the card while trying to confirm it but again, you may not be able to use it for a purchase. As for how you go about getting that dollar amount returned, you may need to contact customer support for assistance.
Additional info for others:
A prepaid card is a payment card that is loaded with money by you or someone else.
A prepaid card looks just like any normal credit or debit card, with a card number, signature strip and company branding. But prepaid cards are unlike credit cards, which provide you with a line of credit. They are also very different from debit cards that are linked to a bank account with an overdraft facility. This is because you can't borrow money with a prepaid card - you can only spend the money you have loaded onto it.
When you use a prepaid card at a retailer, the price of your purchase is deducted from the amount loaded onto your card. You can also make secure purchases by phone or over the Internet as many businesses accept prepaid cards. In addition, if you have a prepaid card that can be reloaded, you usually have the ability to withdraw your money from a cash machine (ATM).
There are many types of prepaid cards available for different purposes. You'll see gift, travel and everyday money cards, to name but a few but they all share the same benefit of being safer and more convenient to use than cash.
