Prepaid cards are becoming more popular because they offer a convenient way to manage money. However, setting up a prepaid card program can be challenging because of the bureaucracy and upfront cost.
That’s why in this article, we’ll explore a faster, cheaper, and more efficient way to create and manage prepaid cards for your customers.
Let’s start by:
- Defining what a prepaid card is and isn’t. Then we’ll look at
- Why they are becoming more popular with consumers
- Benefits of prepaid cards for business
- How to create, issue, and manage prepaid cards without the complications of traditional banks and huge upfront costs
- Benefits of using prepaid cards for businesses and consumers alike
- How Berkeley Payments prepaid card solution work and the key features
- Restrictions or limitations to using prepaid cards
- How to get started with Berkeley Payments prepaid card solution
What is a Prepaid Card?
A prepaid card is a payment method that provides an alternative to carrying cash, checks, and ACH transactions.
It’s basically a debit or credit card without a bank account.
Prepaid cards allow customers to deposit funds onto the card in advance to spend the money in the future, and it cannot be overdrawn.
They are generally issued by banks, card issuers, and Payment Service Providers (PSPs). And can be either physical or virtual cards.
What a Prepaid Card Is Not
A prepaid card is not the same as a credit or debit card.
Because prepaid cards use existing funds to make purchases, users can’t spend more than they have in their accounts.
A prepaid card is not the same as a gift card.
Gift cards are intended for one-time use only, and they can’t be reloaded with additional money. A prepaid card can be reloaded for continued use.
Why Prepaid Cards Are Becoming Popular With Consumers
Prepaid cards offer consumers several benefits, including:
- Wide acceptance
- Additional benefits
Firstly, prepaid cards offer a convenient way to manage money, as users can only spend what’s on the card. This is especially helpful for budgeting and tracking expenses.
Secondly, they’re accepted everywhere debit and credit cards are. This includes online shopping, which allows customers to pay bills and shop from any mobile device or computer.
And thirdly, most issuers offer customers many added benefits like travel insurance and purchase protection, which always makes it the best buy.
Benefits of Prepaid Cards for Businesses
There are many reasons businesses should consider getting a prepaid card program. Some of these include:
- Customer retention
- Increased revenue and transaction fees
- Easily add new customers and manage existing ones
- Decrease cash and check handling and processing costs
First, prepaid cards give you a profitable way to increase customer satisfaction by increasing convenience. You can set up different programs for your business, such as payroll or expense accounting.
And with the right plan, you can even provide added benefits like travel insurance and purchase protection.
Secondly, prepaid cards allow for increased revenue opportunities through transaction fees. Whether you set up your own card or use Berkeley Payments, the ability to process transactions in real-time provides greater flexibility over other payment methods.
Thirdly, ease of setup and use of prepaid cards makes it quick and easy to add new customers and manage existing ones.
Fourthly, increased transaction volume reduces costs associated with cash, check, chargeback management, and paper processing through the ability to process in real-time.
How to Create, Issue, and Manage Prepaid Cards (step-by-step)
Businesses can create prepaid cards for their customers in a few different ways.
Firstly, they can partner with a bank or card issuer to get the prepaid card up and running. They can use a PSP to create and manage the prepaid card program.
Alternatively, they can use a fintech startup like Berkeley Payments to set up and manage their prepaid card solution.
No matter which route businesses decide to go down, there are a number of key considerations they need to take into account.
1. Determine the Prepaid Card Program
The first is to determine what type of prepaid card program they wish to offer.
This could be either
- an open,
- chip-and-PIN or
- virtual card.
These cards can be used anywhere debit and credit cards are accepted. We’ll cover the differences between each type below:
An Open Prepaid Card Solution
An open prepaid card program enables anyone to apply for a prepaid card
This is the most flexible type of prepaid card solution, as businesses can target specific audiences, or they can make cards available to everyone.
A Closed Prepaid Card Solution
Closed prepaid card programs are usually designed for members or only people who meet some eligibility requirements.
A Chip-and-PIN Prepaid Card Solution
Chip and PIN cards are like traditional debit and credit cards: users enter a personal identification number to complete a transaction.
A Virtual Prepaid Card Solution
Virtual prepaid cards are non-physical cards that can be used online or via an app, which is great for eCommerce businesses.
2. Determine the Card’s Features
Once businesses have decided on what type of prepaid card solution they want to offer their customers, they need to choose a card’s features.
Will it have an ATM withdrawal fee? How about a monthly maintenance fee? And other fees associated with the prepaid card program.
How can users fund their prepaid cards? For example, will users be able to add funds via direct deposit?
How will they withdraw money from ATMs, and what is the associated fee with that withdrawal?
How can users contact customer service if they have questions about their prepaid card program or solution?
Some prepaid cards offer more than one feature: banking accounts, savings accounts, bill payment services, and more.
These features can be an enticing addition to a prepaid card program for customers looking for convenience.
The next step is to find a PSP with expertise in setting up prepaid cards.
3. Narrow Down Your PSP Options
There are many different PSPs businesses can choose from when setting up their prepaid card programs.
However, each PSP has its own pros and cons.
For example, banks are great because they have already established trust with customers, but they can be costly to work with since account managers account for every customer’s needs.
Then there are fintech startups like Berkeley Payments.
They offer a more personal, customer-centric approach to PSPs, and they can accommodate businesses that want to go with an open or closed prepaid card solution.
However, fintech startups don’t usually have the reach of traditional institutions such as banks.
Our Prepaid Center provides retailers with an easy way to issue prepaid cards to their customers within minutes.
The customer-centric approach of our Prepaid Center includes flexible loading methods and fee structures, as well as manageable reporting features for merchants. Plus, we offer many different types of payment methods, including Bitcoin.
Our Prepaid Center does more than just offer prepaid cards for retailers.
We also offer our PSP solution to eCommerce businesses, nonprofits, and any other business that wants to create a prepaid card program for their customers or clients.
You can check out the rest of our blog here.
How Berkeley Prepaid Card Solution Work and Key Features
Our prepaid card solution is designed to help businesses create, issue, and manage prepaid cards for their customers without the complications of traditional banks and huge upfront costs.
It’s a cloud-based platform that makes it easy for businesses to set up and manage their prepaid card program.
Key features of our solution include:
- A user-friendly dashboard that allows businesses to create, issue, and manage cards with ease
- Real-time reporting so businesses can track spending and transactions as they happen
- The ability to load funds onto cards in a variety of ways, including through direct deposit, ACH transfers, or even by cash
- The ability to distribute cards physical cards, e-cards, or even mobile wallets
- Terms and conditions for using the prepaid card and a customer service line to deal with any queries or issues
If you’re interested in learning more about our prepaid card solution, please get in touch. We’d be happy to answer any questions you have.
Restrictions or Limitations to Using Prepaid Cards
Prepaid cards offer convenience and flexibility, but we always advise businesses to consider their options before using prepaid cards.
One of the most important things to consider is whether or not your customer base would benefit from receiving prepaid cards.
Some businesses want their customers to use prepaid cards because they offer instant purchasing with no credit check, but there are other options that do not require a credit check, like ACH funding.
The fee structure for prepaid cards is often the most expensive option.
For example, with our Berkeley Prepaid Center, prepaid cards charge a flat monthly fee no matter how much money is loaded onto the card.
ACH funding (payables), on the other hand, is free if you make an initial deposit of at least $100 per month to your account.
How to Get Started with Berkeley Payments Prepaid Card Solution
Getting started with our prepaid card solution is easy and free.
We offer a wide range of payment methods, including Bitcoin and ACH funding (accounts payable).
All you have to do is sign up for a free account, upload your existing customer data or create new customers in our system if they don’t already exist.
From there, you’ll be able to assign a card to your customers and begin distributing cards to them.
To find out more about our prepaid card solution, please contact us today.
We’ll be happy to help you get started and answer any questions you may have.
We can also provide you with a free consultation on how we can increase your business’ revenue and efficiency through the use of prepaid cards.