How smart financial teams use prepaid solutions to improve expense management
Financial teams faced with recurring and unnecessarily cumbersome, manual reimbursements, cash handling, and other administrative workloads are shifting to reloadable prepaid cards to streamline and improve resource allocation, operational efficiency, and expense control.
Prepaid solutions, such as prepaid cards, significantly reduce the time spent on these administrative tasks, leading to faster transactions enhanced by real-time monitoring and streamlined expense reporting.
Put simply, these solutions have simplified corporate finance management in more ways than was ever imagined.
That’s why, more and more financial—and even HR—teams are integrating prepaid cards in their processes.
Let’s explore some of the concepts and factors behind this shift, starting with a quick look at the market for prepaid cards in the corporate space.
The rise of prepaid solutions in corporate finance
The rise of prepaid solutions in corporate finance can be traced to the proliferation and acceptance of digital payments worldwide.
With global payment processing companies, like Visa Inc., which is available in more than 200 countries, leading the charge, businesses became more confident in leveraging prepaid cards to modernize some key financial processes.
In the U.S. alone, the market for prepaid cards is expected to grow at a CAGR of 10.5% to reach USD903.93 billion by 2028, according to a 2024 Research and Markets’ report.
PaymentsJournal suggests that this growth is mainly a result of growing corporate demand for versatile and efficient financial solutions.
Open-loop prepaid cards, such as those offered by Visa and Mastercard, are accepted worldwide wherever the Visa or Mastercard network exists. This is contrary to closed-loop gift cards, which are specific to a store, service, or product.
The flexibility and security offered by these solutions have driven corporate finance teams to adopt them for various purposes, such as payroll cards, incentive cards, and expense management cards.
For your company, this could mean travel expense cards, vacation bonus cards, etc.
Essentially, corporate finance teams are at liberty to designate prepaid cards however they wish, to meet desired expense management goals.
Besides, unlike corporate credit cards, corporate prepaid cards are not linked to your company’s account, and employees can only spend the preloaded amount on the card. You’d find these features particularly useful in managing expense fraud, debts, and overspending.
These benefits, among others, also highlight why businesses are replacing their corporate credit cards with prepaid cards for various companywide applications.
Common use cases for prepaid cards in business
Recall that finance teams can dedicate prepaid cards for specific purposes.
The whole point of prepaid cards is to have a universally accepted card that the company can pre-load with a specified amount that meets the financial requirements of a given business activity/assignment.
With that in mind, most businesses use prepaid cards, such as Visa gift cards, for the following:
- Travel management: Companies provide their employees with a dedicated prepaid card preloaded with sufficient funds to cover all their travel-related costs. These travel cards can help employees book flights and hotels worldwide without needing to handle cash or use their personal funds, while the company maintains oversight of the expenses.
- Staff motivation: It is no news that modern employees demand more personalization and flexibility from the bonuses and gifts that companies offer. And impersonal company souvenirs and “thank you” notes simply don’t cut it anymore. Hence, companies are opting for prepaid cards as a more agreeable and thoughtful gift that easily meets the vastly diverging needs of employees without false assumptions. For context, U.S. companies spent over $6 billion on prepaid cards for employee incentives in 2023 alone, according to PaymentsJournal.
- Marketing and promotions: In the same 2023, U.S. companies spent another $19 billion on consumer incentives, usually in the form of gift cards to customers. This is a fast-growing aspect of corporate marketing and promotions strategies, including referral programs, trade shows, business event perks, research and survey participation, and even as a gesture of goodwill for customer service issues.
- Out-of-office expenses: Some companies offer prepaid cards to their distributed teams as perks to acknowledge potential costs saved for the business by running remote operations. It could also be for the potential costs accrued by remote employees in trying to set up a home office and stay productive. The prepaid card may serve as a stipend for wellness programs, utilities, meal allowances, or home office supplies.
In all these use cases, companies stand to benefit from spectacular budgeting and expense control, while propelling productivity across the board.
With a bit more customization, in any of the cases, companies can further leverage their prepaid cards for global visibility.
Why customization matters
Elementarily, customizing your company’s prepaid cards can boost brand visibility and recognition the same way a business card or a company-branded souvenir does.
However, prepaid cards do it better as they have the advantage of offering more utility than traditional promotional items.
Top corporate prepaid card providers, like Awards2Go, empower brands with custom Visa gift cards, which businesses can personalize with their logos, colors, and personal messaging.
They also provide options for companies to design the prepaid cards—from start to finish, front and back—to generate prepaid cards that draw attention to the brand when and wherever a customer or employee uses them in public.
Put simply, custom prepaid cards are a great way to boost brand awareness and attract more opportunities to your business. And given that they have up to eight years before expiration with assured utility over time, they are an incredibly cost-effective marketing solution.
The cherry on top is that companies can personalize how and when their Visa prepaid cards are preloaded and for what amount, further reinforcing their ability to track and control expenses. This ultimately leads to more benefits for the finance team.
Benefits for finance teams
Corporate Visa prepaid cards and similar prepaid cards from other payment networks are an undeniably instrumental financial management tool for finance teams in small-, medium-, and enterprise-level businesses.
For starters, the digital nature of prepaid cards reduces the burden of excessive cash handling, manual reimbursements, paper receipt reconciliations, and other manual-intensive expense management tasks that often limit the productivity of finance teams.
Moreover, preloading prepaid cards with a dedicated amount for a specific purpose automatically prevents overspending, while equally simplifying expense tracking and reporting.
These benefits directly translate to more time for finance teams to focus on more business-critical financial tasks, resulting in overall operational efficiency.
Conclusion
Businesses that integrate prepaid cards in their marketing, budgeting, and expense management enjoy more transparency and control over their expenditures.
And at a time when small, medium, and large enterprises are embracing automation across various facets of operation, custom corporate visa prepaid cards integrated into accounting management systems are also a good first step towards automating expense tracking and reconciliation.
In essence, now is a great time to explore what the prepaid solutions market has to offer and tap into them to streamline your company’s finance management processes.