In response to government austerity measures and new legislation around crisis loans and community care grants, prepaid cards are increasingly being used by a wide range of public sector organisations.
Prepaid cards enable Local Councils, Health Services, and Quangos (quasi-autonomous non-governmental organisations) to deliver ongoing and one off payments to a range of recipients.
Here are just some of the benefits that public sector organisations can derive from utilising prepaid cards:
Quick and cost-effective method of disbursement
Prepaid cards enable a range of disbursements – the payment of money from a fund – including grants, loans and direct payments to be made to a range of recipients instantly.
This increases the cost effectiveness of benefits disbursement as the costs involved in administering paper disbursements will be reduced.
Reducing risks associated with paper disbursement
Making payments electronically to recipients via a prepaid card will reduce some of the risks associated with paper disbursement.
Prepaid cards are protected with Chip & PIN features and the cardholder’s personal details are not revealed when they make purchases. In contrast, if a cheque is lost this can reveal sensitive details about the employee involved which could lead to frustrating financial problems down the line and potentially fraud.
Easy tracking of payments
Outgoings on prepaid cards can be tracked and monitored online, ensuring that public sector organisations have 24-7 access to the figures they need whenever they require it.
This is also beneficial for the purposes of auditing, as all information will be in a central location.
Freeing up staff
The improved payment efficiency offered by prepaid cards means that public sector staff can be freed up to focus on other important tasks.
Eliminating waste and reaping the benefits of going paperless
Switching to prepaid cards will enable public sector organisations to eliminate any unnecessary waste that could arise from paper payments. This could also act to generate further cost savings. As an example, Health Secretary Jeremy Hunt has challenged the NHS, one of the largest public sector organisations in the world, to go paperless by 2018 to improve services and ‘save billions’.
Access to a wide range of recipients
As no credit history checks are needed for prepaid cards, and they don’t require recipients to have a bank account, this opens up payments to a wide range of recipients, including those who may have a bad credit history. This is one of the central reasons why more and more people are beginning to recognise the benefits of prepaid cards.