Prepaid cards are cards that are pre-loaded with a particular sum. They ensure there is no hassle of carrying cash. These cards are popularly given to employees by companies to track their spends. Prepaid cards leave a trail of where the money was spent and also offer all the features of standard debit and credit cards.
Types of Prepaid cards:
1. Multicurrency Foreign Exchange Card:
A multicurrency foreign exchange card or forex card is a prepaid debit card. An amount is loaded on it, and whenever it is swiped, it works exactly like a debit card. It is possible to withdraw from an ATM using this prepaid card and also swipe it at the point of sale machines.
2. Gift Card:
These cards are used to gift people. They can be loaded up to a particular amount and then work just like a prepaid debit card. The gift card can be for a specific brand, or a gift card containing cash for the person to use as he pleases.
3. Food/Meal Voucher Card:
These meal cards have come to replace the traditional paper vouchers given out every month as food coupons. Having a meal card eliminates duplication and the effort to reconcile and collect reports. These prepaid cards efficiently provide a list of transactions.
4. Corporate card for employees:
This prepaid card helps companies to credit reimbursements, allowances (for example fuel allowance) and other small expenses. Giving them out in the form of prepaid cards ensures there is a paper trail.
5. Travel allowance card:
For employees travelling for office related work, a prepaid debit card is the best option. This ensures there is a track on the amount the employee is spending and if additional funds are needed, they can be merely be loaded to the card.
6. Toll cards:
Toll cards are prepaid cards that help to minimise the time taken to cross a toll plaza. Banks offer them in partnership with the NPCI. This card gets scanned, and the toll is deducted automatically.
7. Medical benefit card:
These prepaid cards are designed explicitly for corporates to give medical reimbursements to their employees.
Benefits of Prepaid cards:
1. Safe and secure:
Prepaid cards are inherently safe to use. It eliminates the need to carry cash. In case of theft, it can be easily blocked without causing much loss.
2. Paper trail:
Prepaid cards maintain an exhaustive report of transactions. It is easy to see where the money has been spent. It eliminates the need for supporting documents.
3. Chip-based security:
Most prepaid cards issued now have chip-based security. These encrypted technologies make it more secure.
4. Convenient to use:
They are also comfortable to swipe and use.