Prepaid business cards are picking up the trend among enterprises in India, and the growth projections are whopping high! And that’s mostly because the perks of these prepaid cards for businesses are undeniably commendable! They are one of the most convenient, safe, and cost-efficient digital payment solutions available in the modern financial market.
The biggest accelerating factors for using prepaid cards for businesses have been COVID-19 and demonetisation. It was when people needed something cashless yet secure to process payments digitally. And prepaid business cards came to the rescue!
If you are a business owner and are new to the concept of prepaid business cards, then this article is a complete guide for you to understand this innovative solution.
Understanding What’s a Prepaid Business Card!
Prepaid business cards, also known as stored-value cards, are ideal alternatives to physical cash. They can be depicted in the form of either a physical or virtual card, which will be connected to a digital wallet that will not be linked to any of the bank accounts.
Banks, businesses, and government entities use these prepaid cards to cut down their costs and reach out to more beneficiaries. Moreover, this also encourages financial inclusion by enabling economic access and monetary disbursements to the underbanked or unbanked population.
The businesses, when assigning prepaid business cards to the beneficiaries, can set the spending limit and load money to the wallet as per rules or policies. Thus, the person using the prepaid card will be free to use the loaded amount, which will be under the control of the issuer.
It is used for assigning business expenses that will be under the control of a specific employee or can be given to the team members as added employment perks or gift cards.
Different Classification of the Prepaid Business Cards
To help you better understand the purpose and usage of prepaid business cards, here’s a detailed elaboration on their classifications:
1. Open-Loop Prepaid Business Card
The open-loop prepaid cards are among the most popular ones that are being used across businesses. They are also stated as network-branded cards, which come with specified logos such as Visa, MasterCard, or others. These prepaid cards are reloadable and usable in both online and offline stores, approved by the card or bank network.
2. Closed-Loop Prepaid Business Card
The closed-loop prepaid business cards are mostly used for single-store usage. These cards can be provided to the employees through transit or gift cards. Being closed-loop, there are no network logos on these cards. Therefore, they can be issued under reloadable and non-reloadable cards, depending on the issuer and the specified usage.
3. Reloadable Prepaid Business Card
These are simple prepaid business cards that can be reloaded with funds. Employers can issue these cards concerning travel, payroll, or other company-oriented expenses. The issuers and the cardholders will have the accessibility to reload most of these prepaid business cards with preset controls or transaction rules.
4. Non-Reloadable Prepaid Business Card
When it is a non-reloadable prepaid business card, be assured the value will be fixed. The cardholders won’t be liable for reloading the money for additional use. The issuer will be loading the card with a specific amount, which will then be discarded once the card runs out of funds. For instance, gift cards issued to employees are non-reloadable!
Are there any Safety Concerns Associated with the Prepaid Business Cards?
Prepaid business cards are modernising the way people make digital transactions. Therefore, the safety of it has been a thought-about consideration long before it was even introduced to the market. But, to give you a perspective, you should know that prepaid cards are safer than debit or credit cards.
There are no such credit risks associated with prepaid business cards, and you cannot overspend using them at any cost. All prepaid cards are enabled with PCI-DSS (Payment Card Industry Data Security Standard) compliance; you will be free from identity theft or data breach issues.
Even if you are using prepaid business cards for offline transactions, you are freeing yourself from the burden of carrying bulk cash. In case of loss or theft of the prepaid card, the cardholder can call the employer or customer care directly to block the usage of it and can apply for a new card with the same amount pre-loaded onto it.
Moreover, as prepaid business cards aren’t linked directly to any bank account, the risk of security issues or data breaches is none!
Benefits of Leveraging the Potential of Prepaid Business Cards as an Important Innovation
As a business owner, it is important for you to think of growing with the trend and adopting profitability at all stages of running your company. And for that, you should adopt the use of prepaid business cards in your payment ecosystem. Here are some of the benefits of it for you to feel more convinced about using it:
1. Control Overspending on Business Expenses
Suppose you have assigned a specific marketing budget, and the head of the department is handling the expenses in the domain. In that case, a prepaid business card with a pre-set budget amount would limit your team leads to being strict on marketing spending. In case there’s something that demands your business to go beyond the specified budget, they will have to consult you about the urgency or importance of it before they can make the transaction. In this way, you will be in better control of overspending issues across various departments.
2. Enhances the Brand Awareness
When you are handing out prepaid business cards to your employees with your corporate branding colours and logos, it will improve the marketability of your business. Thus, it will not just increase your brand awareness among your employees or assigned cardholders but also among the merchants or businesses where the card will be used for processing transactions.
So, this is a clear understanding of how prepaid cards are considerably the best innovation in the digital payments landscape. Modern businesses are using it to streamline their payment ecosystem and introduce more discipline into internal spending habits. Following that, these prepaid cards are now acting as great corporate gifts to employees.
If you are a business owner, then it is expected of you to go digital with your payment infrastructure and introduce prepaid cards to experience its efficacy.
Prepaid Cards have proved to be a game-changer in the contemporary world. FidyPay is a prepaid card provider company that provides fulfillment services to financial institutions.