Overview: The Surge in The Demand for Prepaid Cards
In recent years, a new player in the financial industry has been gaining popularity. It’s none other than prepaid cards. The global pandemic that began in 2020 has accelerated the growth of prepaid cards, due to the flexibility and multiple benefits they offer. Moreover, The Mercator Advisory report of 2021 highlights the growth of prepaid cards, as the report confirms that prepaid cards in the US increased sharply from $374 billion to $397 billion – the dollar has gone up. That number is projected to grow to $462 billion by 2024. Before we dive into the benefits of prepaid cards, let’s explain what they are and how they work to enhance the expense management challenges.
What Are Prepaid Cards?
A prepaid card is a payment card that is loaded before use. Basically, you add money to the card and use it. You can add money to your card through various online and offline methods. Prepaid cards can be used to make payments almost anywhere, be it online transactions or physical payments. It offers the convenience of instant digital payments and the security of traditional bank accounts.
Why Do You Need A Prepaid Card?
Prepaid cards offer a simple and easy payment experience, let’s see how:
- No problem with cash: Prepaid cards ensure smooth and fast transactions, help in expenses management and save you from cash payment problems. All transactions are digital, making them substantially more secure than cash.
- Security: It offers high-end security as well as a most reliable and secure payment method.
- Convenient: Prepaid cards are easy to carry and use, making them the ideal choice for any situation.
- Budgets and Limits: Since only the money loaded on the card can be used, it’s easier to set a budget and keep track of it.
- No Bank Account Required: You don’t need a bank account to have a prepaid card.
- Easy to use: Getting a prepaid card is comparatively much easier than a credit card. Prepaid cards don’t have strict restrictions like other financial products.
- Privacy: Prepaid cards offer privacy to their users so that users can use them freely.
What Are the Top Advantages of Using A Prepaid Business Card?
Let’s see how well a prepaid card can work for your business using the different models.
A New Source of Income
Unlock additional sources of income for your company with a prepaid card. Be it the exchange fee for each transaction or the interest on the loan you give them!
A Safer Alternative for Payments
Offer your employees a much more convenient and secure payment option. Whether it’s a physical card or a virtual one, it’s a secure alternative to cash.
Easy Tracking and Coordination
Avoid wasting time, money, effort, and resources on manual coordination. Employees can track all expenses on your card in a dedicated dashboard. With a virtual account, all transactions are tracked and reported in real-time, and you can automate this process forever. With prepaid cards, expense management is just a cakewalk for the finance team.
Monitor and Control Costs
It can be a little tricky for employees when the payouts come from different directions. We understand that B2B payments in particular can be difficult. By using the prepaid cards, you also have the option to set fee limits for each specific employee to prevent unauthorized transactions. Easily maintain a holistic view of all your transactions, expense management, and cash flows.
They Are Cheaper Than Overdraft Fees
Many business owners use prepaid cards instead of traditional bank accounts because prepaid card fees are usually cheaper than checking account fees. If you’re constantly being charged $35 for withdrawing extra cash from an ATM, a prepaid card will prevent you from weighing your account.
Overdraft fees can add up quickly, so consider using a prepaid card to work around this common problem.
Prepaid Cards Can Be Used Almost Anywhere
Most prepayments are accepted worldwide. In fact, you can use it anywhere – withdrawing cash, paying in-store, shopping online, etc.
There are some great advantages of using a prepaid card – you just have to choose the one that’s right for you!
Bottom Line: Consider A Prepaid Card
A prepaid business credit card may be right for your business, but you’ll need to do some research to find the right one. Read the terms and make sure the agreement meets your business needs.
If you don’t qualify for a traditional credit card, a prepaid card can boost your company’s finances. However, if your credit rating is strong and budgeting is easy, a traditional business credit card may be your best bet for expense management.