It refers to something that is paid for in advance, such as:
* Prepaid phone cards: These allow you to make calls without having a contract with a phone company.
* Prepaid electricity or gas: You pay for your energy usage in advance, often through a meter.
* Prepaid travel cards: These let you pay for travel expenses, like transportation or accommodation, in advance.
Essentially, anything "prepago" means it's paid for before you use it.