Debit cards are the primary method to make electronic payments in most parts of the world. Considering advanced technologies and the ongoing pandemic, consumers seek better alternatives for quick but controlled spending options, like prepaid cards. Consumers can buy these directly, or businesses can issue them to the recipient for specific purposes or rewards. Emerging options as digital solutions for debit cards include digital wallets, peer-to-peer apps, virtual cards, and gift cards, including prepaid digital solutions. Such payment options are making online transactions more convenient for businesses and customers alike.
Prepaid Digital Payment Solutions for Debit Cards:
Businesses, governments, and financial institutions worldwide utilise prepaid digital solutions. These prepaid cards are of two types:
- Open-Loop: These are the general-purpose prepaid cards that allow one to use them in the same way as credit cards and debit cards.
- Close-Loop: These are specific cards that one can only use with a particular business or service. For instance, airlines can issue a prepaid card for their loyal customers that they can only work with that specific airline. Once the card is out of money, you can reload it to use again.
Prepaid cards are used widely in different contexts. Let us take a closer look into using different types of prepaid cards as prepaid digital solutions.
Use of Prepaid Cards as Digital Payment Solutions:
- Businesses issue prepaid cards for compensating an employee. It can be a payroll card, bonus card, health savings accounts card. Also, these can include cards for business trips.
- Prepaid cards are also used widely to provide government benefits like social welfare, scholarships, disability benefits, unemployment benefits, veteran’s benefits, etc.
Following are a few digital payment options for debit cards; some are already acceptable widely, and others are relatively new:
Virtual Prepaid Rewards Card:
A Virtual Prepaid Rewards Card can be used for online shopping. For instance, you can shop online, over the mobile, or add the card to your favourite online store or a mobile application, like amazon or google play.
Government Benefits Card:
Government can issue prepaid cards to the beneficiary instead of getting checks. It is called a government benefit card. The card will be loaded with the benefit amount every month automatically, for example, veterans’ benefits, healthcare benefits, or Social Security benefits. It has eliminated the need to submit claim applications and wait for reimbursement checks. In addition, no further follow-up is required. The recipient can access funds directly in benefit accounts. Such cards allow payment for eligible expenses only under the benefit plan.
General Purpose Reloadable (GPR):
General Purpose Reloadable (GPR) prepaid cards are much like debit cards. Users can load funds; however, these cards are not linked to a traditional bank account. It is a simple digital payment solution for individuals who don’t have access to banking facilities. The cardholder can use this card wherever the VISA network is available.
Student Scholarship Cards:
Governments/Universities can disburse scholarships or refunds quickly through prepaid scholarship cards. Students can securely and seamlessly use these prepaid cards on or off-campus, like a debit or credit card.
Companies offer Payroll Card or disbursement cards to their employees as an alternative to payroll checks or direct deposits. These cards work similarly to debit cards. Recipients can use their cards to make purchases or withdraw cash at ATMs. Companies can also issue these cards for employees’ convenience on tours.
Thus, these cards work like debit cards and are based on advanced technology to make specific expenses covered under the specific benefit plan.
Prepaid Digital Payment Solutions
Businesses offering and accepting prepaid cards experience improved customer loyalty. In addition, the issuance of these cards also increases brand exposure. But how can organisations avail these benefits?
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Businesses can partner with prepaid digital solutions providers with experience in offering various prepaid solutions. In addition, these partners should be able to issue Mastercard Prepaid Debit cards along with a range of digital payment solutions available for corporations and government entities.