Benefits of using prepaid cards for international business travel
Choosing a method of payment when you are abroad can be tricky, however, with a prepaid card, your business travel expenses can become a breeze. In Europe alone, over $1.1 billion is spent on travel expenses every year on preloaded cards.
A prepaid card is a smart way to keep track of your own expenses, and that of your employees’. Often offering better exchange rates, a prepaid card is an excellent alternative to carrying cash and an innovative solution to ever-increasing business travel costs.
How it works
Before any business trip, a prepaid card can be preloaded with your travel expense budget. The card then works in the same fashion as a debit card and can be used to make purchases and withdraw cash. Cards can even be topped up externally in the event of an emergency.
What types of prepaid travel cards are available?
There are three types of prepaid cards available depending on the locations to which employees are travelling and the currencies in use:
- Single currency
This type of card allows the business traveller to buy currency upfront, locking in a favourable exchange rate. However, exchange rates can fluctuate, so there is a potential of losing out if the pound strengthens.
Multi-currency cards are ideal if an employee is visiting more than one country. The main benefit of this type of card is the ability to load cards with several different currencies including sterling, euros and dollars.
What to look for in a prepaid card
When contemplating using prepaid cards for business travel, consider the following options in choosing the best card for specific business requirements:
- Available currencies that reflect the destinations
- Support from a credible payment provider such as Visa or Mastercard
- Competitive exchange rates
- Cash limits and budgeting tools
- Fees that might include loading fees, exchange rate fees and withdrawal fees
Prepaid card vs credit card
Credit cards can often offer a foreign exchange rate that’s very close to the bank rate and may even provide insurance on purchases. However, in the context of business travel, credit cards have two significant drawbacks:
- Costly cash withdrawals
Businesses may be able to find a credit card with a 0% usage fee. However, with cash withdrawals firms could end up paying a higher rate of interest, plus a cash advance fee.
Instead of planning business expenses upfront, firms rely upon credit. If they can’t repay the entire amount, then they’ll end up paying interest, in contrast with a pre-loaded prepaid card.
The benefits of using a prepaid card for business travel
With an easily managed prepaid card, businesses can bypass many of the inefficiencies and hassle of traditional business travel. Streamlining processes, including administration, reduces overall travel costs while the security and convenience of card payment reduces the need for cash and traveller’s cheques.
This innovative travel solution offers a range of benefits:
- Safer than cash as the card can be cancelled if it is lost or stolen, giving business travellers security and peace of mind.
- Greater flexibility to pay by card or withdraw cash that is accounted for upfront
- Employees are no longer expected to use their own cash or credit cards to cover their expenses, leaving them out of pocket
- The ability to control and keep track of business expenses and streamlines reporting as there’s no longer a need to hang onto paper receipts
- Substantial savings on interest rates and exchange fees
- Greater financial control and reduced waste through maximum load amounts and withdrawal restrictions
- Pre-budgeting for an entire trip allows managers to make informed decisions regarding future business travel plans
- Prepaid cards backed by recognised providers are accepted worldwide by hotels and restaurants
- Zero Liability protects businesses and employees if the card is lost or stolen after registration
- Simplified money management and streamlined travel processes that save your business time and money
Greater flexibility and control
If an employee needs to spend money whilst abroad, a prepaid card puts managers firmly in control. There is no need for credit checks to acquire a prepaid card, and they provide all the flexibility of a business credit card with none of the hassle. It is therefore little wonder that prepaid cards are an increasingly popular choice.
Find out if Soldo is the right prepaid card for your business here.