Today’s consumers have more options than ever when it comes to managing their money. Instead of getting paid by check or cash, which they then deposit into a bank account, many people opt to get paid via a reloadable prepaid card. Prepaid cards give people instant access to money. They can use the cards to make purchases at stores, pay bills, or withdraw cash from an ATM.
Companies that want to issue prepaid cards to customers, employees, or other payees have a few options for getting prepaid cards. One option is white labeling. With white labeling, one company produces a product, such as a prepaid card, then sells the use of that product to a second company. The second company puts its logo and branding on the product and has some ownership of it, even though it didn’t create or design the product itself. White label prepaid cards allow your company to take advantage of the benefits of using reloadable prepaid cards without having to spend the time and money building a card from scratch.
Learn more about how white label prepaid cards work and the benefits of using them.
What Is a Prepaid Card?
Sometimes called stored-value cards, prepaid cards look like credit or debit cards and have some features in common with them. One of the defining features of a prepaid card is that it has a certain amount of money loaded onto it. The card itself isn’t attached to a bank account and doesn’t give the user the option of borrowing money to make purchases.
Prepaid cards are attractive to many people because they provide an alternative way to get paid and to make payments. People who don’t have traditional bank accounts can receive payments from employers, government agencies, or clients on a prepaid card. The cards make it possible for people who don’t have a credit or debit card to shop online or at places that don’t accept cash.
Although some prepaid cards charge fees to users, there are prepaid cards with no fees. No fee cards can be particularly attractive to those who use a prepaid card as an alternative to a traditional checking account. Some of the fees commonly charged by prepaid cards include ATM fees, activation fees, and monthly service fees. Usually, the company that creates and issues the card collects the money from fees.
A white label prepaid card is a card that’s been developed by one company (A) and that another company (B) puts its branding on. Company B benefits from fees charged by the card. For example, if the card charges $1 for every ATM withdrawal, Company B will collect the $1 fee.
How Do Prepaid Cards Work?
The premise behind reloadable prepaid cards is relatively simple. A company issues the card to a user. The card can be physical, such as a traditional plastic card with a 16-digit account number, expiration date, and the company’s logo printed on it. A prepaid card can also be a virtual card stored on a digital wallet such as Apple Pay or Google Pay.
A user loads money onto a prepaid card, and the card works as a stand-alone payment device, meaning it’s not connected to a bank account. People have multiple options for loading money onto a card. They can transfer funds from a traditional bank account to the card, they can add cash to the card when they buy it, or they can use a third-party payment provider, such as Venmo or Paypal, to put money onto the card.
The value of the card is directly linked to the amount of money loaded onto it. Unlike a debit card that’s connected to a checking account, a user can’t overdraw from a prepaid card. If someone tries to make a purchase for $45 when there is only $40 on the card, the purchase will be declined.
Some companies use white label prepaid cards to issue payments to employees or contractors. For example, Uber offers prepaid cards to its drivers through a program called Instant Pay. Drivers can choose to link a separate debit card to their Instant Pay account or use a card issued by Uber. Uber incentivizes the use of its own card by not charging service fees or a fee for cashing out. If a person wants to use a debit card connected to a bank, there is a fee of 50 cents per payment.
What Are the Benefits of White Label Prepaid Cards?
White label prepaid cards offer multiple benefits to companies that use them. Some benefits include:
- Set up is easy: With white labeling, you put your brand’s logo on a product developed by another company. You don’t have to spend time developing or researching the best way to bring the product to market. Someone has already done the hard work for you.
- Creates an additional revenue stream: Depending on the fees connected to the cards, introducing prepaid cards can create multiple streams of revenue for your company. You might get a portion of the sale every time someone uses their card to pay, or you might get the fee charged when a user withdraws cash at an ATM.
- Customizable: You can customize your prepaid cards with your brand’s logo and color scheme. You can also decide who gets to use the cards, such as your employees, contractors, customers, or students.
- Increases customer loyalty: Prepaid cards can increase people’s loyalty to your brand. If you introduced a prepaid card that offers rewards, such as points or cash back, people are more likely to use it for purchases. Contractors or employees might be more likely to choose the prepaid card option for payments rather than a check or direct deposit.
- Streamlines payroll: Prepaid cards can streamline the payroll process, which can save your company time and money, especially if you have a large workforce. Connecting prepaid cards to people’s earnings can automate the payment process. It also saves money as you don’t have to pay for paper checks.
Create Your Own Reloadable Prepaid Debit Cards With Hydrogen
Offering prepaid cards to your customers, employees, or contractors introduces a new revenue stream for your company and can simplify your accounts payable and payroll process. Hydrogen’s no-code platform makes it easy to issue virtual and physical cards to users. Your branding is on the cards while our technology is behind them. The program is simple to set up using our embeddable apps. To learn more, request access to our platform today.