Prepaid cards give companies an exceptional degree of control over real time disbursements and pay outs and also eliminate or reduce expenses associated with the issuance of paper cheques. The added advantage of prepaid cards is that they also eliminate the risks of handling cash and hence, provide insurance benefits to boot and this is one of the primary reason why a whole myriad of organisations from charities to PayDay lenders have been exploring the option of using prepaid cards for disbursements.
The further advantage is that prepaid cards are an enabling all inclusive payment solution and recipients do not need a bank account and can typically use the funds disbursed via the card at millions of locations worldwide subject to their scheme – such as Mastercard or Visa.
Corporates using prepaid cards as a disbursement mechanism typically use them as a payment solution to cover a variety of recurring business expenses including employee travel costs and supplier purchases. Due to the very nature of prepaid cards, funds on the card are limited to those loaded by the company and hence there is reduced liability and reduced exposure to fraud. There is also better monitoring and control and an avoidance of issues typically experienced with employee credit cards. It is also possible to restrict card access at certain merchants.
Some of the councils in the UK already benefiting from such disbursement solutions include the London Borough of Merton, Nottinghamshire County Council & Bury Council.
VISA and Obopay
Visa and Obopay, a leading mobile and instant payment solutions provider, recently announced a collaboration to enable near real-time payment solutions for disbursing electronic funds to a prepaid card.
This agreement will allow Obopay to offer its partners the ability to disburse funds from their corporate account directly onto a Visa prepaid card which they can provide to a payee. This I likely to have a significant impact across the industry with benefits being seen across the insurance, incentives, payroll, business expenses, charities and government disbursements sector. These are likely to be extremely beneficial in instances where recipients need to have access to funds immediately.
David Schwartz, vice president of product and corporate marketing for Obopay commented “By introducing a Visa prepaid card solution, Obopay offers near real-time disbursement capabilities that allow our customers to avoid the time delay of issuing cash or check”.
For more information about prepaid cards, their benefits and their use in business and consumer sectors, visit http://www.prepaid365.com