Many owners of small businesses distribute checks or petty cash to employees for normal company expenses. However, with these payment methods, a business is more susceptible to theft and fraud. Fortunately, business prepaid debit cards for employees can help you manage your company’s expenses and improve your budgeting. With corporate expense cards, the way your employees’ purchase services and goods will keep pace with your business.
Is your organization looking to issue prepaid business debit cards to your employees? With these cards, you can easily manage your company spending and monitor cash flow. Trust Hydrogen to help your business issue employee debit cards.
What Are Prepaid Cards?
Prepaid cards are used similarly to credit cards. You can make payments with a prepaid card in-store, online, and over the phone. Prepaid cards come with a pre-loaded, specific amount of funds, which means the cardholder can’t spend more money than what is on the card. This is what makes these cards so valuable and less risky for the business.
For corporate users of these cards, prepaid and debit cards essentially function the same way. Both only allow the user to spend the money available on the card, and typically, there isn’t any overdraft or credit function. However, the key difference lies in which merchants accept these cards. Many do not accept cards that are purely prepaid for technical reasons.
How Do Business Debit Cards Work?
For your employees, business debit cards work the same way as any other payment card. Your workers can either use the chip and pin or swipe and sign, and they can make in-store or online payments.
Both physical and virtual business debit cards work with the world’s most trusted brands, which means these cards are accepted at millions of stores across multiple countries. With these cards, you and your employees will have the same flexibility as you would with traditional cards. If needed, you may even be able to use business debit cards at the ATM.
For an employee to buy items with a business debit card, their manager needs to first approve their access to funds. You can determine the monthly budget your employees can access through the card, along with the maximum amount they can use on a single purchase. As long as a purchase falls within these parameters, it is validated automatically. Otherwise, a manager will need to approve the purchase first.
If you prefer, you can also set the transaction and budget limits to zero so every payment can only be made by request. Alternatively, you can also allow high-level employees to have access to higher amounts of funds and more financial freedom.
Benefits of Corporate Debit Cards
Your corporate debit cards will be used in combination with your business bank account, just as you would use other debit or credit cards. The amount of each purchase is subtracted from your company’s bank account, and for most businesses, switching from petty cash or credit cards to corporate debit cards is a smart financial move. Here are a few benefits your organization can reap from adopting this payment method:
1. Use Corporate Debit Cards Wherever Major Credit Cards Can Be Used
If you typically allow your employees to buy what they need and get reimbursed later, then corporate debit cards may be the right option for your business. Your employees can use these cards at virtually any store that accepts major credit cards, which means these debit cards will be convenient and flexible for you and your workers. You can also say goodbye to the added paperwork and time of reimbursing your employees after they make a purchase.
2. Say Goodbye to the Challenges of Credit Cards
To use credit cards, your business needs to qualify for the use of them. For new businesses, this can be especially difficult. Even if your company does qualify, you may still need to pay credit card fees and interest charges on top of the purchases made. This can quickly make budgeting for business expenses more difficult, which is why choosing corporate debit cards may be the better option for your enterprise.
3. Better Control Your Business Expenses
While corporate debit cards can be used just about everywhere, you can also better control your business expenses by placing limits on where your employees can use these cards. Additionally, you can set limits for each card. If you give corporate expense cards to employees in different roles, for example, you may want to set lower limits for workers in roles that don’t require much purchasing power. You can also designate card usage categories, such as gas, food, office supplies, or specific stores.
4. Enjoy the Efficient Features
At Hydrogen, we have optimized the process for issuing corporate debit cards by building functional features and tools into our platform. These additions can help you provide the best possible experience for your employees and business. Some of our features include:
- Anti-fraud alert
- Overdraft alerts
- Spending controls
- Intelligent spending
- Administrative control
- Lending and credit decisions
We also offer 1% cashback for every purchase you or your employees make, allowing your business to earn money while you spend.
5. Streamline Your Expense Management
With corporate debit cards, you can also easily streamline your expense management. Every expense can be viewed on an online dashboard where you can analyze every purchase made, plus any declines. For example, if any of your employees try to make a personal purchase from their corporate debit card, you’ll know. With business debit cards, you can oversee company expenditures without any risk or hassle.
Issue Prepaid Expense Cards With Hydrogen
At Hydrogen, we help organizations build their own debit card and virtual card issuance. We offer a no-code offering or API for issuing prepaid employee expense cards. With our API platform, development is simple and your business will be provided with the storage space, business logic, analytics, and user interface (UI) needed to make a successful component for issuing employee expense debit cards.
Hydrogen integrates with issuers, banks, program managers, and popular vendors. These work collaboratively to make your product competitive and enhance the user experience. If you’re ready to issue prepaid expense cards for your employees, sign up for access to Hydrogen today.