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Credit cards offer teams global payment convenience for their business expenses. Prepaid credit cards deliver the same convenience, while also allowing for even more flexible spending management. What makes this card the best business credit card?
Understanding the different types of modern payment cards can sometimes be difficult. The rise of prepaid cards has continued steadily in recent years. Especially after in the EU tighter e-money regulations was adopted.
Meanwhile, prepaid cards have also entered the realm of business payments. As an organisation, this allows you to offer multiple business payment methods offer to employees, such as a prepaid credit card.
❯ What is a business prepaid credit card?
❯ How does it work?
❯ When do you use this card?
❯ What are the advantages of business prepaid cards?
❯ Business payment needs in practice
❯ What are the benefits of an integrated payment system?
❯ How to choose the best business payment system?
What exactly is a business prepaid credit card?
With a normal credit card, cardholders borrow money to pay with. A prepaid card is a variant where you can only spend money you have advanced yourself. This type of credit card is an official means of payment in the Netherlands.
When we talk about a prepaid credit card, this often refers to a prepaid debit card.
Hereby standing you not only guarantee the amount to be spent, but actually transfer it in advance to an account linked to the card.
The cards, like regular credit cards, are almost always issued by International Card Services (ICS). In the Netherlands, ICS is the largest issuer of (prepaid) credit cards. A card issuer is a financial institution authorised to provide credit lines via a payment card.
Apart from issuing cards, ICS also handles the administration and transactions of the most well-known credit cards from Mastercard and Visa. There are also several retailers, such as Bijenkorf, for example, that issue prepaid cards.
They then do this in collaboration with a card issuer and link their bonus point system to it.
How does a prepaid credit card work in practice?
Using a credit card is extremely simple.
You first load the card with cash yourself. So this is done simply through a top-up. The amount you deposit can vary between €10 to more than €50,000. Only the amount you deposit on the card can then be used to pay at the shop.
So when there is no money left on the card, you cannot use it temporarily. This means you cannot go into the red, which is possible with many other payment cards.
After the balance is deposited on the card, it functions the same as a regular credit card.
So putting money on the card is done by transferring to the prepaid debit card balance from a normal checking account. When the transfer takes place, the amount is immediately on the card.
Most prepaid credit cards allow you to view the current balance via a web login or associated banking app. The card is never directly connected to your normal (business) bank account. Thus, your bank accounts all associated data is protected at all times.
When you want to make a payment in a webshop, it is done just like with a regular credit card. You choose the payment option ‘pay by credit card’ and follow the shop's further payment instructions. You then enter the cardholder's name, card number, expiry date and CVC code (see image).
All these details can be found on the front and back of the card itself. In a physical shop, you usually don't need these details and only have to enter your PIN.
When do you use business prepaid credit cards?
You can use a business prepaid credit card for many purposes. The cards are great for online spending and payments at home and abroad. You can also simply withdraw cash from an ATM with it.
❯ Online payments:
They are very suitable for online purchases. For example, digital services, software subscriptions or online advertising costs.
You link the card to the platform and the amounts are then automatically debited from the card.
In doing so, make sure there is always enough money on the card. This will prevent the service from being cut off. This can be easily set up by an automatic transfer. Of course, you can also make one-off purchases online, such as for printer paper or a delivery service.
❯ Non-recurring business expenses:
If, as an organisation, you have many changing suppliers or if one-off purchases are made regularly, this is often not possible on invoice.
You can then easily pay such expenses in advance with a prepaid credit card.
❯ Travelling abroad:
When travelling abroad, it is useful to have a credit card available. Hotel reservations or airline tickets can often only be booked with credit cards.
On the spot, you pay for taxi or restaurant with this. Or you withdraw money in local currency at the ATM.
For sudden large expenses, a regular credit card limit may not be enough. With a prepaid card, you can increase your balance with a few clicks, so you'll never be stuck. Besides, Mastercard cards are accepted all over the world.
What are the benefits?
Using prepaid cards has many advantages. For instance, it reduces the chances of overspending, as only money you deposit on the card yourself can be spent.
So you are always in control and it offers teams a lot of convenience and flexibility at the same time.
In addition, an online transaction statement gives you much better insight into all spending. Every time a transaction is made, you will see it appear in real time in the statement.
❯ Control and insight:
By using prepaid credit cards, you always have the latest transaction data at hand. This allows you to make a tight budget measurement and act quickly in case of unexpected expenses.
In case of ad-hoc expenses, the finance team can raise the balance of a credit card in seconds.
If you work with an integrated payment and claims solution, you can even easily assign all transactions to cost centres or project ids. This allows you to link expenses directly to accounting records.
This not only gives you better control, but also shortens administrative processing.
❯ Convenience for teams:
The cards are useful for organisations because they enable teams to be more agile and efficient. When employees need to pay for their hotel during a business trip, for example, using cash or a Maestro card is very inconvenient.
With a credit card, you can pay almost anywhere.Internally, you can appoint someone to manage the budget for the team.
Within the set limits, the team can make quick decisions together with this cash manager. This allows them to make the necessary business expenditures in their own responsibility at any time.
❯ No more cash needed:
Employee use of cash or private advances creates risks and is also susceptible to fraud. With such a card, you solve this problem to a very large extent.
Indeed, electronic payments are much easier to track. The payment process becomes more secure and the claims process watertight.
Business payment needs in practice
Employees are increasingly spending online in addition to spending in physical shops. Purchases in a shop can be paid with cash or a Maestro card.
But, online, you need a credit card. Since a prepaid card basically works the same as a regular credit card, you can pay by credit card at almost any webshop.
It provides relief for dozens of business expenses such as:
❯ Ordering a gift for an employee in an online shop;
❯ Online grocery shopping at a supermarket;
❯ Ordering office supplies;
❯ Paying for a software subscription.
When employees incur many small expenses, it is convenient when these are integrated into one payment and claims system.
This is the only way to ensure that all transactions, accountabilities and their control come together watertight.
That way, you can process expenses faster and more securely. Such an all-in-one solution Eric Smeding finds for his team in SimpledCard.
We were looking for an innovative payment method that provides online payments and clear budgeting. We found that solution at SimpledCard.
What are the benefits of an integrated payment system?
An integrated payment solution offers you several functionalities and benefits:
1. Business prepaid credit cards from, for example SimpledCard issue yourself. This means you receive a supply of cards and you issue these credit cards to your employees without the intervention of a bank.
You scale up when needed. If an employee leaves the team, you easily reallocate the same card to another employee.
You have the flexibility to make only certain cost centres or cost types available per team. This ensures smooth integration with your accounting system.
2. In the mobile app, cardholders see all the transactions they have made. To this, they add their own receipts. They do this by taking a picture of the receipt with the app. Then they select the cost type, cost centre and any project id.
3. All cards are connected to your own online card management system. This gives you full insight into card spending. Periodic transfers ensure that there is always enough money on the cards.
In addition, you can define your own administrator roles. This allows you to determine who can raise the budget in real time and who approves declarations. This way, you ensure the right level of governance for your organisation.
How to choose the best business payment system?
There are many integrated solutions, all with their own functionalities. When researching which system would best suit your organisation, it is good to pay attention to a few points:
❯ Which network do the cards come from and are they accepted worldwide?
❯ Ask whether the prepaid card provider is authorised to issue payment cards in your country.
❯ Do prepaid cards guarantee both online and offline payments?
❯ What about the due diligence process? Are there any additional formalities required when adding a new cardholder?
❯ Find out how much support is offered. When you have an urgent payment problem, you want to be helped quickly and competently.
❯ How well does the system align with your organisation's governance process? What expertise does the provider offer in setting up the workflow?
❯ If, as an organisation, you have multiple BVs and different accounts, can the system still be used properly?
❯ Is the software also used by similar companies in your sector?
Tip: With credit cards, it is sometimes not possible to pay in supermarkets or other physical shops. They then only accept Maestro cards. Want to make sure you have a suitable means of payment for all your purchases? Then check how to Maestro variant of prepaid debit cards best used.
Getting started with a business prepaid credit card
Find out for yourself what the possibilities are with business self-loading credit cards. Our experts will help you map out which kind of debit cards best suit your financial workflow.
Then determine how you can use them within your organisation to optimise your spend management. Get started today and schedule a no-obligation consultation.
Start using business prepaid credit cards today. Plan now a no-obligation discussion with one of our experts and map out together which solution suits your organisation.
FAQ
What is a business prepaid credit card?
A business prepaid credit card is a payment card that is pre-loaded with a certain amount. Unlike a regular credit card, which pays on credit, a prepaid card allows only the pre-paid amount to be spent.
How does a business prepaid credit card work?
You load the card with a desired amount. You can then make payments until the available balance is reached. Once the balance runs out, the card must be reloaded to make further payments.
What are the benefits of a business prepaid credit card?
Benefits include better control over spending, reduced risk of overspending, no possibility of being in the red and increased convenience for teams in making business payments.
Where can I use a business prepaid credit card?
These cards can be used for online payments, one-off business expenses, travel abroad and ATM withdrawals, depending on card conditions.
How is a prepaid credit card different from a regular credit card?
With a regular credit card, you pay on credit and receive a bill later. With a prepaid credit card, you pay with pre-loaded credit, so you do not buy on credit and pay no interest.
Are there any fees for using a business prepaid credit card?
This depends on the card issuer. Possible charges may include purchase fees, top-up fees, monthly maintenance fees and cash withdrawal fees. It is important to check the card issuer's terms and conditions.
How can I apply for a business prepaid credit card?
You can apply for a business prepaid credit card from financial institutions that offer these cards. The application process varies by provider and can often be completed online.
Is a business prepaid credit card safe to use?
Yes, these cards are generally safe to use. Because you can only spend what you have charged, the risk of debt is limited. Moreover, many cards offer security features such as PIN protection and the ability to immediately block the card if lost.
