In the business world nowadays, there is one plastic card that has become one of the most helpful allies of businesses—prepaid cards for business. This development however is not exactly surprising as prepaid cards for business offer benefits that are difficult to match.
Prepaid cards for business are used as a convenient way for businesses for their expenses. It is also used as a means of providing compensation to their employees. Why is this setup considered ideal? Unlike credit or debit business cards, employees won’t have access to the company account.
Prepaid Cards for Business: How They Work
When you use prepaid cards for business, you can load as much money as you would need and like, at any time that is convenient for you. Depending on the provider, you will have various ways of reloading money onto your prepaid card. For starters, you can load money online, through the phone, or via a secure login portal.
Some prepaid card issuers will also allow you to easily manage some of the aspects of your prepaid card using a safe online portal or console. The best thing? It is all for free. This means you can check your transactions, transfer money, and freeze the cards in the event of theft or loss.
Debit and Credit Cards vs. Prepaid Cards for Business
Business prepaid cards are deemed the ideal alternatives to credit and debit cards. How are the three different from one another? Let us start by exploring some of their common features. Let’s start with a debit card. When you use one, you will be using the money that is available in your account.
In other words, you will be accessing whatever balance that’s available in your bank account. This type of setup also gives cardholders the opportunity to spend as much as they like. Understandably, when using a debit card, you are spending whatever balance that’s available in your bank account.
While this setup can give cardholders easy access to the money in the account, this can be very risky as well. This is especially true for businesses with large teams. That said, employers need to be very cautious and picky about who they give access to the cards. Since only one debit card is used, it is possible for many employees to have access to it.
This can make it very difficult for the finance team to track the user of the card during auditing and reconciliation. Since the credit card is linked to the employer’s line of credit, the monthly or annual credit limit will be determined by the provider. Just like debit cards, credit cards are also prone to misuse.
In addition, since you won’t be getting your statement until the end of each month, it becomes even more difficult for you to resolve any misuse as they occur. When you use a prepaid card however, you will have a totally different experience. For starters, prepaid cards are very easy to obtain and very easy to track.
When you use a prepaid card to purchase things you will need for the business, the amount of the purchase will be deducted directly from the balance that is available on the card. If the balance available on the prepaid card is no longer sufficient to cover the amount of the transaction, your spending will stop automatically.
That said, you won’t be able to use the card for the time being until such time that you have successfully loaded money onto your card. As soon as money has been loaded to your prepaid card successfully, you can immediately use your card for both purchase transactions and ATM withdrawals.