Prepaid card programs are flexible and customizable tools for both businesses and consumers that come with multiple benefits. These benefits include a regulated payroll management system, loyalty enhancing reward programs, and predefines the customer-oriented development strategy.
Card programs allow for greater agility, stronger business relationships with consumers, and the ability to spend more time and energy fine-tuning your company’s approach. However, prepaid card programs are often overlooked by businesses whereas they present a flexible and comprehensive tool to control business payments and expenses and play an important role in the finances of banked and unbanked consumers and businesses.
Better payroll and spending regulation
The pandemic has changed the approach to the whole expense regulation system and forced small businesses to re-evaluate employee spending in a more efficient way. One of these ways can be considered prepaid cards and prepaid card programs, in particular.
A complicated and outdated payroll management system that relied primarily on paper checks has become history and nowadays the convenience and agility provided by prepaid cards is certainly the main factor why most businesses refer to them for payroll payments.
The prepaid card programs streamline payroll administration which helps managers, accountants, and business administration to control, monitor instantaneous payroll payments while gaining more compliance, cost-effectiveness, and greater payroll management. Companies can also use the cards to manage and track employee expense accounts, enabling companies to prevent overspending.
Opportunities for unbanked categories
The main objective of Fintech is to provide financial services for everyone.
Despite the common digitalization and advancement in technologies, there are still unbanked zones with over a thousand households and people all over the world who have no formal relationship with the banking system. This can be for different reasons, whether be it dissatisfaction with bank proposals and reluctance to enter confused and tangled banking bureaucracy, or the difficulties to access banking services because of rural specifications.
Payment networks such as Mastercard, set up programs to provide the vulnerable locals with prepaid card to enable their access to digital and electronic tools to receive funds.
Another trend is kid banking. Most Fintech companies have prepaid card programs to serve the under 18 segments. There are many positives within the program - kids develop healthy financial habits and learn how to manage their finances. They are taught financial responsibility and learn how to better manage their children's allowances. Meanwhile, parents can easily monitor their children expenses, receive notifications each ешьу a purchase with the card is made and thus fully control the financial activity of their children.
Prepaid card programs are more flexible and easy-to-handle tools to achieve greater productivity and to handle payments for small local businesses. No need for a bank account or complicated paperwork. As COVID-19 has expedited the transition to a cashless world, prepaid cards will become more important than ever to help the unbanked. For example, some government programs will use a prepaid card for recurring transactions, such as unemployment benefits and food assistance.
Employers can also issue prepaid cards instead of paper checks or direct deposits in order to distribute paychecks or pension funds in times of lockdown.