A few things to consider before switching to prepaid cards for business expenses.
Prepaid cards for business are safe, simple and effective. After loading them with money (hence the ‘prepaid’) you, or your employees, can use them to make purchases or withdraw cash until the money runs out. Then you load them up again.
Unlike credit cards, prepaid cards are not linked directly to a bank account or credit facility. This means that there’s no interest added to purchases because you’re spending your own money, and there’s no accumulation of debt. Because you are not asking for credit, prepaid cards are also much easier to get hold of.
That last point is crucial. Many small businesses are turned down for business credit cards because they’re relatively new. They also haven’t got enough of a trading track record to have built up the necessary credit score.
Even if you have – or could have – a corporate credit card, there are still many good reasons to embrace prepaid business cards.
As this guide will show, prepaid cards can be a game changer when it comes to expense management, and an excellent way to empower employees with controlled access to company money.
According to Mastercard, ‘Companies of every size are turning to prepaid cards for their business purchases and expenses. While credit cards for business continue to play a vital role in business life, they’re not always available to all employees.’
While this may be true, not all prepaid cards for business are the same.
For a start, different issuing companies charge different fees. It’s worth taking a moment to learn about the landscape of fees, because it should influence your choice. Typical fees include:
Most cards charge some, but not all, of these fees, so different cards will be more suitable for different businesses, depending on what you use them for and how.
Many providers specify a maximum amount you can hold on a prepaid card for business, which might be anything up to £25,000. Some have minimum balance requirements, typically £50 or £100. Some have a maximum daily transaction cost – say £5,000 to £20,000 – or a maximum single purchase value. ATM withdrawals are often limited to around £250 per day.
The answer to this question is almost certainly yes. You don’t have to share your credit history to apply. Mastercard doesn’t even require a business bank account. Proof of identification is all you will usually need to provide, alongside some basic company details.
This is one of the most important benefits of prepaid cards for business – it means you can get one even if your business is new or your credit rating is low.
The best card for you will depend on how you’re planning on using it. Here’s what you need to consider…
Check out all the features available with Soldo prepaid cards here.
Prepaid business cards aren’t just a last resort for those who can’t get credit. In fact, many companies now use prepaid cards alongside a company credit card. There are good reasons why.
Prepaid cards are a useful tool for many businesses, but they do have downsides:
Your team needs to meet clients and attend trade shows, but expense spending can easily get out of hand. With prepaid cards, you can set realistic limits for travel, hotels and subsistence. Either way, everyone can travel worry-free.
Studies show that millennial workers value personal development opportunities more than any other in-work benefit.
By loading up prepaid cards with a set amount earmarked for L&D, you can motivate your workforce and give HR a useful recruitment and retention tool. All without any administrative burden at all: it’s a set-and-forget L&D strategy!
Don’t make line managers go cap in hand every time they want to reward teams for a successful conference, sales quarter or marketing campaign. Give them a controlled amount for impromptu celebrations and encourage autonomy and responsible spending.
With preloaded cards, you’re also minimising their admin: no more expense reports, no more signing off each month (or forensically assessing expenses which you don’t want to sign off…)
There are many ways prepaid cards can push your business forward. First, choose a plan that fits your business. Click here.
The most obvious advantage prepaid cards have over credit cards is that it’s much easier to get an account. No credit checks are required.
And with a prepaid card for business, you never risk debt spiralling out of control.
Research shows that people find it easier to spend excessively on credit cards than with cash – and prepaid cards are much like cash. When the loaded sum is spent, it’s spent.
You are also spending company money that already exists, rather than building up debt that will need to be paid off in the future. When multiple employees are spending money on your company’s behalf, it’s easy to rack up large debts quickly.
Prepaid cards for business offer a couple of key benefits over debit cards.
De-risking spend: It can be risky to issue multiple employees with debit cards, especially if you have an overdraft facility.
A preloaded debit card offers more control, with less chance of spiralling debt. A stolen debit card can be used to make purchases up to an account overdraft limit that might run into tens of thousands of pounds. With prepaid, you choose the spending limit on every card.
Visibility: When you load cards with preset amounts, you make accurate budgeting easy. You also get a real-time view of spending, which isn’t always possible with debit cards.
Prepaid cards are as much a management tool as a spending system. They allow you to:
Soldo is a system of real and virtual prepaid cards, backed by a sophisticated management platform. With Soldo, you can empower your people to make their own spending decisions, without ever losing overall control.
It’s proactive expense management at your fingertips. Get started here.
Many prepaid cards integrate seamlessly with accounting software for small business, making the lives of your finance staff easier. Soldo integrates directly with Xero, for example.
Manual data entry is error-prone, leading to inaccurate records and missed VAT deadlines. Prepaid card management systems automatically send data to accounting software, which results in more accurate accounts. And they can be reconciled in just a couple of clicks!
That also means that your ledger staff can spend their time on more productive and strategic activities that push your business forward.
Prepaid cards give you greater visibility on your spending, as well as the insight you need to spend more wisely.
A couple of things to keep in mind:
Prepaid cards for business can automate many time-leaching processes:
Create automatic reloads for specific cards, based on your rules and timings. For example, staff who regularly entertain clients don’t want to be embarrassed by running out of money at the wrong time. Create automatic top-up rules for specific cards, individuals or teams.
Spending rules are automatically applied, freeing you from the burden of overseeing countless trivial spending decisions.
Prepaid cards for business expenses make life easier for your employees:
Soldo has a prepaid card for business that offers all the benefits mentioned in this page.
Our prepaid cards let you take control of company spending while simplifying spending and expense management, and reporting. They empower employees and makes their lives easier.
To add to that, our spend management platform offers great money-saving insight and makes bookkeeping effortless.
We don’t have a hidden deposit or transaction fees. We don’t insist on a minimum number of cards and there are no minimum deposits.
Soldo’s plans and prices are straightforward: We do not charge transaction fees and our foreign exchange fee is fixed at just 1% for Pro and Premium plans. There is no charge to add funds to accounts, just a small monthly fee per card for Pro and Premium plans.
Signing up is easy and you can order as many cards as you’d like as soon as you do. You can have a virtual prepaid card up and running in less than one working day – and physical cards in less than five.
Yes. You are not asking for a line of credit, so your credit score doesn’t come into it. To get started, you just need to be a registered company and provide details for the company director and admin of your Soldo account.
Once you complete the simple application procedure your Soldo cards should arrive in 2 – 5 days. Load them up, create controls and you’re all set.
Soldo’s plastic Mastercard debit cards can be used abroad, just like any other debit card. Soldo’s Mastercard debit cards are issued in either GBP, EUR, or USD. Company wallets can be set up in GBP, EUR or USD so you can manage your offices around the world in local currency.
All prepaid cards have the same basic functionality, but only a few have the data management capabilities needed to integrate with popular accounting software.
Those that do, like Soldo, can export and import transaction data to Quickbooks and other accounting apps. Soldo’s payment console also seamlessly integrates with Xero, including its automatic bank feed and accounting APIs.
This is particularly useful for accountants, as they’ll be able to get a closer insight into how and where your money is being spent and offer answers for how to make things run a little more smoothly.