Business prepaid cards: How do they work and what are the benefits?

How do business prepaid cards work?

Like debit cards, business prepaid cards deduct the purchase amount from the card's balance. But unlike debit or credit cards, business prepaid cards are pre-loaded with a set amount from the business.

As the business, you load funds onto the prepaid card, usually done online, which then becomes the card's balance. These funds can come directly from your acquiring balance which helps funds flow seamlessly from one side of your business to the other, without tying up working capital in transit.

Employees within your business can use the prepaid cards to pay suppliers or for other business expenses such as booking travel or paying for meals. If you work in online travel, offer incentive programs or provide on-demand services, you’ll find business prepaid cards especially beneficial thanks to their flexibility, convenience, ease of use, and other benefits, which we’ll describe further down the page.

Advantages of business prepaid Card

Prepaid cards can be a great solution for accelerating how you pay suppliers and streamlining business spend overall. If you launch a card program with a full stack issuing provider (like Checkout.com) you can even use funds loaded straight from the acquiring balance, removing the complexity around pre-funding your prepaid cards.

Better expense management

Business prepaid cards allow employers to set spending limits on the card, monitor employee spending, and receive detailed reports of all transactions. Meanwhile, employees no longer have to use their own cash reserves or be out-of-pocket for any length of time.

Improve cash flow

Unlike using a credit card, your business can move money quickly and easily through a single platform via your virtual prepaid card, while streamlining your costs and making it easier to reconcile transactions. This is particularly true when partnering with a full stack issuing provider that enables you to use funds from your acquiring balance to fund cards quickly and easily.

Increase approval rates

Some business prepaid card issuers, like Checkout.com, enable you to get faster and more reliable issuing thanks to the issuer’s direct scheme connections. This means your business can start spending and improving its cash flow more quickly than it could when applying for a credit card.