5 Misconceptions About Setting Up a Payments Program
At this point, it’s pretty obvious that there are a multitude of use cases for corporate mass payments, from insurance disbursements, payroll, rebates, employee rewards and more. But regardless of what program you plan to implement, a lot of corporations have misconceptions about the features available to them when it comes to setting up a program.
So, we thought we’d share the 5 most common misconceptions that we encounter in hopes of clarifying some things before you begin to plan your next mass payments program.
1. LET’S DO THE TIME WARP AGAIN!
One of the biggest and most important misconceptions we encounter is the expectations of quick turnarounds on custom card programs. Unless you’ve ordered our Rush Prepaid Cards (which can be shipped out in as fast as a day) or standard card designs, custom programs require careful planning and approvals. We need to make sure your program is built to meet your specific business needs, and that a path to success has been clearly carved out.
Once your program is approved, cards are printed, and your cards are stocked in inventory, you can place card orders against your inventory. Cards are typically delivered in 2 business days (depending of course on where they’re being mailed), as you draw down on your stock.
A prepaid card is a financial instrument and as such, custom programs need to go through FI (financial institution) and Visa or Mastercard approval processes. Along with the FIs, we need to assess program details, technical requirements, anti-money-laundering and know-your-customer compliance, design elements (card, carrier and other collateral), as well as invoicing, escrow and value load requirements. The more detailed and custom the program, the longer the timeline is.
2. MO MONEY MO PROBLEMS
Or, rather, the opposite is more true “No Money Mo Problems.”
Oftentimes we encounter organizations that assume that because one of our biggest offerings are prepaid cards, that the cards already come pre-paid. But that’s not the case. Although the cards function like prepaid Visa and Mastercard cards, the cards are empty until you fund them.
Usually this is done by clients funding an escrow account, which is bank-controlled and secured (Berkeley does not touch this money). When you place a “value load order” on your prepaid cards, the money is drawn from this escrow account and placed onto the card (this happens instantly). Essentially, the faster your escrow account is funded, the faster your program can go live.
3. THE DEBT I OWE
While prepaid cards are issued by Visa or Mastercard, they do not function like credit cards. This means that they don’t affect companies’ or cardholders’ credit rating. Because prepaid cards are a pay-before model and not a pay-after, there is no requirement for credit checks as there is no “credit” being issued.
This also means that you can’t set up a payments program in hopes that it will improve your cardholder’s credit score, and your customers can rest easy that the money they’re spending won’t come back to bite them in the butt.
Another misconception we often encounter is who is responsible for loading the cards? Can cardholders load funds? Does it have to be a corporation? What if cards run out of funds and need to be reloaded?
The answer to the first question is no, cardholders can’t load funds onto cards. Because cards are a financial instrument purchased by organizations for mass payments, only the organization sponsoring the card can load funds onto cards in their program. This means we also don’t accept personal credit cards for payments.
Foresee your program needing reloadable functionality? Not to fret, we have a ton of different types of reloadable card options that are sure to fit your needs.
5. TIME AFTER TIME
And finally, plastic sometimes takes time. Especially custom designs.
For fast fulfillment, we have everything from standard card designs, rush card programs, and virtual cards that can be emailed to recipients instantly.
But if you’re looking for custom physical cards, we’re more than happy to provide a workback schedule that lets you know exactly when your cards will be ready to ship.
So don’t be afraid to ask what your options are for speed to market when it comes to prepaid cards – there are always alternatives and options if you need cards sooner rather than later.