Are Open-Loop Prepaid Cards The Right Move For Your Business? We Answer All of Your Questions
Is your company looking to launch a new prepaid program? If so, you might have some questions. DCR Strategies Inc. is a world leader in the prepaid card and loyalty market. We strive to offer the most innovative prepaid and loyalty solutions for all types of business. Check out our questions and answers below, and contact us to find out how you can get a customized virtual Mastercard® or Visa® prepaid card.
What are open-loop prepaid cards?
Open-loop prepaid cards are the fastest growing form of electronic payment. Prepaid cards offer an easy-to-use, secure, and flexible service without all of the disadvantages of credit or outdated cheque-based systems. Open-loop prepaid cards can be used anywhere that Mastercard or Visa is accepted. They work like traditional credit cards, with one essential difference – a set amount of funds has been preloaded onto the card.
What can prepaid cards do?
Prepaid cards have several business-related uses:
• Simplify and manage corporate payments and expenses
• Distribute awards/incentives to employees
• Facilitate rebates/incentives/promotions to clients
• Deliver benefits payments
Different Ways Prepaid Cards Can Reduce Business Expenses
Are prepaid cards expensive to operate?
Banking fees typically range from $218 to $314 annually for keeping a chequing account – by comparison, prepaid card fees generally range from $76 to $261 annually when cardholders use direct deposit to their prepaid card. Without direct deposit, the fees range from $184 to $380. By switching to prepaid cards, employers can save up to $223 per employee, per year. Prepaid payroll cards can also save employees more than $1,000 per year when compared to fee-based money management tools used by un- and underbanked such as cheque-cashing stores.
Will a prepaid program save my business money?
Prepaid cards are cost-effective and flexible for corporate expenses. Employers can allocate a specified amount of money on a prepaid card to pay for expenses such as travel, distribution, marketing, etc.
However, prepaid cards aren’t just for managing corporate expenses; they also have several other cost-effective, business-related uses:
• Distribute award/incentives/rebates to employees
• Simplify corporate payments
• Deliver insurance payments + health benefits
Does prepaid offer my company a competitive advantage?
Yes. 81% of executives believe that digital transformation is a competitive advantage. Prepaid cards offer a wide variety of benefits for both employers and employees. Prepaid cards offer fast and inexpensive ways to help keep corporate costs in check, incentivize employees, settle expense accounts, and reduce the wait time between payments.
Are other businesses making the same switch?
Yes! In 2004, 81 percent of businesses used cheques for business-to-business payments. In 2007 that number fell to 74 percent. In 2016, the number decreased even further to only 51 percent.
4 Reasons Why Your Business Needs To Switch From Cheques To Prepaid
Do employees really want their money loaded onto pay cards?
Millennials are now the largest generation in the U.S. workforce. 37 percent of all millennials feel “it would be valuable to have their pay loaded on a pay card each payday.” Numbers-wise, that amounts to over 29 million millennials in the U.S. alone! 64 percent of millennials believe that paycards should be offered by employers as a payment option, and this number jumps to a complete 100 percent among current pay card users.
So a prepaid program will make my employees happier?
A prepaid program could help motivate your employees and increase commitment, loyalty, and retention. Just a mere 5% increase in employee retention can result in a 25-85% boost in profits. Disengaged workers cost the economy $300 billion or more per year.
Will switching my employees over to prepaid lead to more sales and happier customers?
According to a study conducted by Demand Metric, companies with employee engagement levels of over 50% (which is high) retain over 85% of their customers. Business units that scored in the top 25% on employee engagement had customer ratings 12% higher than business units scoring in the bottom 25% of engagement. Organizations with higher than average levels of employee engagement realized 27% higher profits, 50% higher sales, 50% higher customer loyalty levels, and 38% above-average productivity.
Prepaid Card Growth is Imminent for Households and Businesses
Have questions or looking to learn more about prepaid cards?
Feel free to contact us by visiting our contact page. DCR offers years of experience and expertise in prepaid card program—from the launching stage all the way through fulfillment and program management.