For businesses (such as event management, consultants, contractors and fleet vehicle services) or specific organizational functions such as sales, which require employees to be constantly traveling, meeting people and entertaining clients, prepaid expense cards are a convenient way to track daily expenses. Be it a business lunch, quick stop-over at a café on the way to a meeting or managing expenses incurred on fuel, prepaid expense cards offer multiple benefits to small businesses.
Firstly, they enable you to seamlessly extend the resources necessary for your staff to carry on their day to day functioning without them having to go through the cumbersome process of filing expense reports. Unlike credit cards, which have an assigned limit, with prepaid cards small businesses can fund higher amounts for employee expenses as per monthly or daily requirements.
Secondly, they make controlling of incidental businesses expenses that much easier. Let’s face it we have all been in situations when a trusted employee or team member has coughed up a hefty claim at the end of the month, leaving us wondering how this could have happened right under our proverbial noses! On the other hand with prepaid expense cards you know exactly how much has been budgeted for each employee and you have a statement at the end of the month to know how they have utilized the funds. Some prepaid cards also allow expenditures to be restricted as per the category of expense.
Thirdly, it’s a time saver. Prepaid cards save you, and perhaps another member of your staff, valuable productive business hours, which would have otherwise been spent approving and processing employee expense reports.
PEX Card, which was launched in 2009 as a provider of prepaid Visa debit cards (issued by The BanCorp Bank.), announced the mobile version of its pre-paid card program earlier this year. With ‘all hands on the deck scenario’ in small businesses, this app takes the convenience of using prepaid expense cards for small businesses to the next level. Aptly called PEX Mobile, the app from PEX Card allows businesses to fund cards issued to employees remotely via smartphones (ios and android mobile devices) thereby reducing funding time for unplanned expenses and avoiding delays if the account administrator is not in the office. PEX prepaid expense cards are available at a monthly fee of $7.5 and a one-time set up cost of $49.95. They offer a 2 month free trial period and can customize pricing for requirements of upwards of 50 cards.
Are there any caveats to using a pre-paid card? Before you decide to use prepaid cards for your business, be sure to check the associated charges other than the application fee. PEXCard, for instance, charges a $25.00 returned transfer request fee, $5.00 for ACH transfer from PEX Account to your bank and a card replacement fee of $5.00. Similarly, Amex Prepaid Cards allow for one free ATM transaction per month and subsequent withdrawals are charged $2 per transaction, besides the fee charged by other ATM operators. For obvious credit control reasons, there are restrictions to loading the cards using cash deposits. Finally, with a pre-paid card, you don’t enjoy a credit limit. So you have to be pretty sure of the value of funding available on the card before you offer to pay, especially while entertaining clients.