5 Dec 2024

Why Prepaid Business Debit Cards are a Game-Changer for Workers in the Field

Joseph Karim, Product Marketing Manager at Profit

Managing company expenses for employees in the field can be a balancing act. Overspending is easy when using a credit card and dipping into personal finances to cover company expenses is always a teeth grinder for employees. Internal approval processes and controls on cards and cash help to mitigate risk but can be onerous for both managers and field staff. So, how do you effectively manage cash flow while liberating your employees to spend what’s needed without efficiency-killing hoops to jump through? Prepaid business debit cards offer a smart solution, reducing stress for both the company and the workers in the field. With spending controls in place and a cap on available funds, the risks of overspending and fraudulent purchases are greatly reduced.

How do Prepaid Debit Cards Work?

Prepaid debit cards work like regular debit cards, with the key difference is that funds are preloaded and limited to an established value until they are replenished. Employees in the field know exactly what their spending limit is. Better yet, employers can see transactions when they happen. In other words, no more authorizing a $100 purchase only to find out $200 was spent.

According to Inc.com, employees using company credit cards spend nearly 27% of company funds on personal expenses to offset the delay in reimbursement. While some businesses allow this, there can be many discrepancies when it comes to keeping track of unauthorized purchases. This is where prepaid debit cards are the game-changer.

Prepaid Debit Cards vs Business Credit Cards

With prepaid debit cards, there’s more control over how funds are spent. Unauthorized purchases, fraud, and overspending are mitigated with funding limits, daily spending limits, and merchant category restrictions. Look for prepaid card solutions, like Profit, that prompt employees to capture a picture of the receipt after every purchase to eliminate the need for filing tedious expense reports.

While business credit cards do have their advantages, overspending is all too common. This can lead to high, unexpected balances at the end of the month and high-interest fees, putting the business’ credit at risk. Plus, tracking expenses for credit cards is more complicated. Things like “entertainment expenses” can quickly become questionable. Prepaid debit cards eliminate these concerns by offering real-time expense control and simplifying field worker expense management.

Top 8 Benefits of Using Prepaid Business Debit Cards for Workers in the Field

The prepaid card market experienced rapid growth over the last year and is expected to continue at a compound annual growth rate (CAGR) of 13.4%, according to The Business Research Company.

If you’re still unsure whether prepaid business debit cards are right for your company, consider these top 8 benefits.

1. Preventing Debt Build Up

With prepaid debit cards, you can only spend what’s loaded—there’s no risk of racking up debt or dealing with high-interest charges.

2. Quick and Easy Approval Process

No lengthy applications or credit checks are needed; prepaid cards can be issued, activated and in the hands of your employees quickly.

3. Enhanced Control Over Field Expenses

Spending limits, ATM access, merchant code restrictions and other controls can be set for each card, reducing the risk of employees going over budget or making unauthorized purchases.

4. Reducing Fraud and Financial Losses

If a card is lost or compromised, financial losses are restricted to the preloaded amount. Cards can be deactivated instantly by administrators. Virtual cards can also be issued for one-off purchases without the risk of putting a credit card on file.

5. Simplifying Travel Expenses

Prepaid cards are ideal for travel and make it easier for employees to access funds without the need to carry cash, carrying company expenses on their personal cards.

6. Real-Time Payment Tracking for Field Workers

Managers can link cards to a project and monitor spending in real time enhancing their ability to make decisions and prevent budget overages.

7. Instant Access to Funds for On-the-Go Purchases

Employees can request funds when needed and funds are immediately available for quick purchases like fuel, supplies, or meals. A convenient way to keep operations running smoothly.

8. Seamless Integration with Reporting Tools

Profit’s prepaid card system integrates seamlessly with popular accounting software like QuickBooks, making expense tracking, categorization, and reporting easier.

Achieving Financial Control

When employees are in the field, they need quick access to funds for essentials like materials, equipment, or repairs—and expecting them to pay out of pocket isn’t ideal. At the same time, full spending freedom isn’t practical or responsible for the business. Prepaid business debit cards strike the perfect balance, offering flexibility with allocated funds while keeping spending under control and empowering employees to make necessary purchases.

Profit by Paymentus is your financial tool kit to help you take control of employee spending, reduce the risk of fraud, and eliminate expense reports

With Profit you can issue physical or virtual pre-paid cards with a click, set individual card limits and fund cards in seconds, view spending in real-time, auto-replenish balances, automatically capture and track receipts.

Contact us for a free demo and see how we can transform your employee spending and put you on the path to smarter financial management.

References

Expert Opinion By Suzanne Lucas, Human resources consultant and founder (2024) Close to a Third of Employees Use Company Credit Cards for Personal Expenses. Retrieved by Inc.
Bank Rate. (2024) Prepaid cards vs. debit cards. Retrieved by FDIC.
Prepaid Card Global Market Report. (2024) Prepaid card market definition and segments. Retrieved by The Business Research Company.