There’s no question that prepaid cards are becoming more commonplace, especially as the use of cash declines. Prepaid gift cards are now seen more frequently in stores than the traditional paper gift voucher, and prepaid cards are also a useful way of helping people to budget. In addition, with online shopping on the rise, prepaid cards are very popular in the form of virtual or digital cards.
Closed loop and open loop
There are two main types of prepaid card available – closed loop and open loop. So what’s the difference between the two and what are the benefits? When you think of a gift card for a particular store, what you’re actually thinking of is a closed-loop card. This type of prepaid card is designed to only be used at that store and cannot be accepted for payments elsewhere.
On the other hand, an open-loop card is not tied to a particular store or brand. These cards are usually identified by a Visa or Mastercard logo and can be used anywhere that accepts card payments. Open-loop cards are typically loaded with cash in specific increments and are often used to help with budgeting. This type of card is also frequently sold to travellers as a more convenient and secure way of taking currency abroad, or for making card payments in other countries without incurring hefty fees.
Solutions for businesses
Both closed-loop and open-loop cards have useful applications for businesses. When it comes to employee incentives and rewards, both types of prepaid card are great options. A closed-loop card for a designated store can be a really personal way to reward a particular employee, gifting them something you know they’ll genuinely appreciate.
Alternatively, an open-loop card makes your employees’ rewards work for them – handy if you’re buying cards in bulk or you want to give flexible rewards and incentives. B4B Payments offer prepaid cards that you can adapt to your needs, and which ensure every employee gets a perk they love.
Open-loop cards are also a fantastic solution for business expenses; they eliminate the need for employees to use their own personal finances. Open-loop prepaid cards allow employees to spend money wherever they choose but make it easier to stick to a budget. A prepaid business card from B4B Payments also makes it simple to manage expenses and receipts – you can track all expenses through our secure platform and receive comprehensive reports on expenditure.
Prepaid cards in the future
It seems clear that the use of prepaid cards, both closed loop and open loop, is likely to continue rising. If you’re looking for a smart solution to rewards, expenses, and business payments, the flexible payment solutions from B4B Payments could be the answer. Our products allow you to track and manage expenditure, whilst giving freedom and flexibility to employees. If you’re interested in streamlining payments and incentives with prepaid cards and would like more information, get in touch