Using prepaid cards instead of cash, cheques or credit cards could reduce risks and hassle for your business.

Using prepaid cards instead of cash, cheques or credit cards could reduce risks and hassle for your business.

Phil Smallwood, co-founder of marketing and distribution specialist TPS Direct, trusts his staff ‘implicitly’ but was concerned about the security implications of handing out company credit cards. Now using prepaid cards (which have a Visa or Mastercard logo but require cash to be ‘loaded’ onto them in advance) allows Smallwood to control expenses, completing transactions online or via his mobile phone.

‘We had one [employee] whose car broke down in Newcastle and he had to book accommodation for the night,’ Smallwood recalls. ‘He rang me at eight in the evening and I was able to send a text to our prepaid card supplier and load his card instantly with enough money to pay for a hotel.’

As well as convenience and security, prepaid cards offer the chance to monitor expenses in real time via the web. Typical costs are a few pounds per card plus transaction fees or monthly charges depending on your supplier. There’s a general upper limit of £3,000 per card, imposed to deter money laundering.

Jonathan Rees, sales director at prepaid specialist M-Cube, says they’ve seen rapid growth in their business as ‘credit card limits are being capped’ by banks. He adds that the cards are also being used to pay staff without bank accounts, eliminating the need to handle cash.