Commercial Prepaid Cards Showing Signs of Growth
Thursday, August 27, 2015
Prepaid commercial cards are increasingly becoming an attractive option for entrepreneurs and small business owners, according to an article published today by PYMNTS.com.
These prepaid cards offer an alternative to traditional credit cards, which aren't always a great fit for small business owners, PYMNTS.com notes.
“Most often an SMB owner applying for a small business credit card still has to undergo personal credit validation,” Tom Grant, CEO of corporate prepaid card company PEX Card, told PYMNTS.com, “as the business owner is personally liable for charges if the company fails to pay.”
Prepaid cards, Grant said, can address issues of risk, because card balances day-to-day tend to be in the hundreds of dollars, not thousands.
According to research published by TD Bank in April, the popularity of consumer prepaid cards is on the rise, with 25 percent of Americans saying that they are currently using or have used a prepaid card. That figure jumps to 33 percent among people ages 18-34.
Separate research published last year by SYNERGISTICS suggests that this trend could be carrying over into the business world. More than half of small business respondents said they were aware of business prepaid cards. And around half of the respondents who said they were aware of these cards said they obtained this type of card in the past year.
Among those not currently using business prepaid cards, 44 percent said they were "somewhat" or "very" interested in them.
Click here for more information on prepaid cards from the NAPCP.
Sources: PYMNTS.com, TD Bank, SYNERGISTICS