Editor’s note: More companies are using prepaid payroll cards as a way of paying employees. These cards act a lot like a credit or debit card, but with less expense involved. In our prior posts in this series, we covered the growing use of prepaid, their added benefits and security and how to engage and excite employees and compliance.
Here, in our final post, Wendy Humphrey, the commercial prepaid team lead at Conduent, discusses how the prepaid phenomenon can help companies eliminate checks altogether.
Q: Why should companies use prepaid cards?
In previous blogs we’ve talked about how they’re great for helping employees without bank accounts get paid on time, which means no more waiting for checks to clear, and no more checking fees. They also help employees manage budgets. For example, they can help with the planning of daily, weekly and monthly outgoings, or for setting transaction limits for things like food and travel.
But they’re great for the companies too. They make administration of payments so easy. We find that after companies implement a prepaid payroll card program, they often convert other areas issuing paper checks to prepaid cards, moving to more time and cost efficient digital processes.
Q: Interesting – can you give us an example?
A: Well, prepaid payroll cards can be used as incentives to improve employees’ job performance. Let’s say a chain of restaurants wants to improve the customer service in its restaurants. Every time a member of service staff gets a 10 out of 10 rating in customer questionnaires, they could be given a credit on a prepaid card. It’s a great way of paying any bonus to staff.
Q: Couldn’t this be done with any payment system?
Sure, but it probably wouldn’t be as easy to track or administrate. Prepaid payment programs are such an efficient way to pay and receive money that setting up incentive programs becomes easy. Companies can use an online portal to make payments and track activity. This allows them to track and reconcile their payment expenses in an orderly way. They can look at their full expense or in subsets of individual employees.
Q: Can you suggest a few more ways companies can use prepaid?
Prepaid cards can be used to budget and track employees’ travel expenses. Unlike a corporate card the amount of funds on a prepaid card can be fixed. This makes it easier for companies to enforce spending limits.
And they can be used anywhere MasterCard is accepted, including for withdrawing cash at ATMs. Managing project budgets is another goouse for prepaid cards. Project members could be given prepaid cards to help them make all project-related purchases.
Q: So ease of use and administration is a big benefit?
A: Absolutely. Prepaid can be used to consolidate and simplify most payments currently being accomplished by checks. Doing analytics on payments becomes easy because all the data is in one neat system. And an online prepaid portal lets managers or accounts teams easily keep an eye on how everyone is using the card.
Q: What’s your advice to companies that want to start exploring prepaid possibilities?
Just look at every single form of payment you’re making, then consider whether prepaid cards can be used. In most cases you’ll find the answer is yes – whether it’s for payroll, travel expenses, bills, project expenses, bonuses, incentives or making payments to freelancers and temporary workers. Plus, the number of ways to make prepaid work for a business is growing – whether you’re an enterprise or a small start-up.
Q: Tell us about that.
Okay. So soon, prepaid payment products will to become integrated with mobile devices. This will be great for employees. Mobile apps will help them manage money even more easily, and losing physical cards will no longer be an issue.
Mobile prepaid systems will also make it even easier for companies to offer benefits to employees and customers. For example, they could easily partner with merchants to offer discounts in their goods or services.
Q: So what’s the next step?
As I mentioned, it’s all about identifying the payment processes that can be converted or replaced with a prepaid option. It’ll become obvious in almost every example how prepaid can help. Plus, finding the right prepaid provider with a flexible platform is critical to ensure the needs you’ve identified can turn into reality for the company and your employees.
For more on prepaid payroll cards and how Conduent can help you and your employees benefit from this new approach, please visit our Sense prepaid card page.
Next week: Bonus post. How prepaid card technology is playing a role in delivery of public sector benefits.