(Or maybe not so surprising...prepaid is catching on fast after all)
Prepaid cards are pretty hot right now. They’ve become the most important method of payment for workers who don’t have bank accounts. And research is showing that Millennials just love them. That’s why more and more companies are using prepaid cards for a wide range of payment solutions – saving money on administrative costs and bringing a long list of direct deposit benefits to their businesses and employees.
Here’s a list of eight ways companies are using business prepaid cards for employees. Let’s see if they surprise you…
1. For vacationers to carry instead of cash
Sandra recently took her beloved (but occasionally stubborn) mother-in-law, Barbara, on a 10-day luxury cruise through Scandinavia. The cruise line offered all passengers a prepaid card, which could be loaded with funds at the start of their trip and throughout the cruise.
Sandra put $1,500 on hers, then eventually managed to persuade Barbara to increase her budget from $200 to $1,000. Sandra assured Barbara she could withdraw any funds left over at the end of the trip. And if her card was lost or stolen, it could easily be replaced.
The women were able to use their prepaid debit cards anywhere MasterCard was accepted – that’s pretty much every hotel, shop and restaurant. And on the few occasions the pair needed cash, they withdrew it from ATMs.
The price of a glass of wine in Scandinavian restaurants made Barbara glad she had added funds to her card — and she enjoyed the vacation of a lifetime. Prepaid card providers can issue white-label business prepaid cards for employees to companies – allowing them to offer cards with their own branding.
2. For customer refunds and incentives
Thomas, a New York stockbroker, took a day off work to accept the delivery of his new teak luxury bed and goose-feather mattress from one of the city’s most exclusive furniture store chains. After the bed was assembled by delivery men, Thomas gratefully laid down to test it out. Suddenly, he heard a crack and felt one of its legs buckle. Minutes later, customer services assistant Amy was holding her phone half a yard from her ear as Thomas yelled down the line about his “terrifying” experience. After she told Thomas he’d have to wait two weeks for a new bed to be delivered, he reached boiling point.
So Amy quickly offered a $150 prepaid debit card as compensation. (In the past, the company has issued checks for compensation cases – meaning recipients have had to endure the inconvenience of cashing them.) The card, which can be used anywhere MasterCard is accepted (including at ATMs) did the trick. Thomas calmed down. He received his prepaid card in the mail the next day, and went to use the prepaid debit card to help buy an even better bed from the chain.
3. For keeping travel expenses organized and within budget
Stanley is a hard-working regional salesman for an electronics manufacturer. While travelling coast to coast over the past eight years, he’s had to painstakingly collect receipts to claim back monthly expenses. It’s been a time-consuming process for him and for the accounts department (who he’s secretly furious at for not trusting him with a company credit card).
But the head of accounts, Angela, just made Stanley’s year by giving him a prepaid
expenses card. It’s loaded with enough to cover Stanley’s travel expenses for the month. And he can use it anywhere MasterCard is accepted – including for getting cash at ATMs. It means tracking expenses is automated and submitting is easy. Meanwhile, Stanley can go to the Travel Card portal to view all his charges and easily develop his expense reports.
And life just got way better for the accounts team as well. The portal lets them monitor how each of their employees is using the prepaid debit card. They can generate real-time reports on individuals, groups or time periods – which means they no longer have to wait until the end of the month to go through piles of receipts and monitor payments. Meanwhile, it’s easier to enforce spending limits, so the company is saving money over the long term with these direct deposit benefits.
4. For employee incentives and training incentives
Martha is an actress. She really is. But at the moment she’s working as a waitress for a restaurant chain in Los Angeles. Company bosses have given Martha and all her co-workers (most of them budding actors and actresses too) prepaid cards to receive payments and incentives.
All tips are now split and then loaded onto each individual’s prepaid card (which can be used at ATMs and wherever MasterCard is accepted). And every time customers leave a positive review in their post-meal questionnaires, a further contribution is made. The cards have encouraged Martha to become even more attentive to customers (even the high maintenance ones). And customers have grown to love the warm and welcoming atmosphere at the chain’s restaurants, which keep getting busier. The company is also aiming to boost its ratings in tourist guides. So Martha and her colleagues must undergo training. For every point increase, they receive a payment on the card.
The chain’s finance department uses an online portal to deposit and monitor the payments. Reconciling them is easy because reports can be generated for each individual and the staff as a whole. The payroll card has also turned out to be an awesome way to retain the best staff. And employees see their efforts are being noticed, increasing their job satisfaction.
Now whenever the company wants to encourage a certain type of behavior among staff, or a business outcome, they have a simple, flexible way to make it happen.
5. For disaster-area funding
The home of New Jersey couple Susan and Harry was flooded in a recent storm. They lost nearly all their possessions and had no access to funds.
The couple were eligible for state and federal benefits. So they collected a prepaid card loaded with funds at a local school that was being used as a distribution point. Susan and Harry selected and activated their PIN numbers and they were ready to use their prepaid debit card to buy all the essentials they desperately needed. Conduent has supported state partners and citizens during weather-related disasters over many years.
6. For customer retention
Emilie has just bought a sports car from a large chain of car dealerships. The chain wants Emilie and all their customers to take the car back for a regular service. So they offered her a prepaid card with her car purchase. The card was loaded with $50. If Emilie returns and uses the card for her first oil change, the chain will load new funds for her next service.
While inspiring the loyalty of customers like Emilie, and encouraging sales among people who hear about the offer, the chain is enjoying great brand-awareness benefits too. Because every time customers see the card in their wallets, they think of their dealership.
7. To incent employee health and wellness
A Minnesota-based audio products manufacturer recently launched a staff wellness incentive program. For every point earned by each employee, $1 is deposited onto a business prepaid card they’ve each been given.
Engineer Jack has earned 20 points for completing a health screening, and another 15 points for completing a health questionnaire. He also receives two points a week for walking 10,000 steps each day, which are recorded on a wearable device distributed to every member of staff. As Jack repeatedly tells his colleagues, he hasn’t walked much further than the distance between his front door and car since he left school. But Jack’s a competitive type, and the wellness program is a chance to prove people wrong. The incentive has been a powerful motivator for others too. And there’s a big buzz around the wellness program. The HR chief reckons it’s a great way to retain and attract employees.
And the presence of the branded business prepaid card in people’s wallet serves as a constant reminder to stay healthy. The time and cost of administering the health drive has been pretty minimal. An online portal maximizes direct deposit benefits and makes it easy to deposit funds and report and reconcile points scored.
8. To pay wages
University friends Pete and John launched their Silicon Valley start-up in 2013. Like 99.85 percent of students on their university computer science course, the pair were obsessed with gaming. But after setting up a game-design business, they saw an opportunity to use their skills to create virtual reality environments.
In recent conversations with their 95-strong staff, most of whom are under the age of 25, Pete and John discovered an aversion to using banks and prospective direct deposit benefits. The employees had little trust in banks, gained almost no interest from their accounts anyway, and believed credit cards made it too easy to get into debt.
Pete and John were already using business prepaid cards to pay freelancers. And they knew prepaid payroll cards had become wildly popular among workers who didn’t have bank accounts. So they gave every member of staff the chance to be paid this way. The option has proved very popular. Prepaid cards let the workforce do everything they would with a debit or credit card (use ATMs, purchase online or at virtually any store). They also like being able to track their spending.
The company has also used prepaid debit card to consolidate and simplify almost all of its business payments – including paying bills, bonuses and travel expenses. Prepaid cards are saving Pete and John a lot of time and money.
Maybe some of these ways to use prepaid debit card surprised you, maybe some didn’t. What’s certain is that the number of ways organizations are using prepaid cards is expanding fast. Meanwhile the cards are becoming popular in every walk of life.
If you’d like to find out more (or if you’ve got your own idea on how your organization could make use of a prepaid card) give us a call or drop us an email. We’d love to hear from you.