The idea of prepaid cards for business seems straightforward enough – you have available funds, you add them to a card, and you use that card to spend your money in a way that is safer, more secure, and easier to carry than cash. But there is still some confusion about the various types of prepaid cards that are available in the marketplace today, and the industry-specific terminology used for prepaid cards can add another layer of complexity.
Before you apply online for a prepaid card for business, it is a good idea to spend some time learning about the more common types of prepaid cards for business to make sure you choose the right one for your intended purposes.
Open-Loop Prepaid Cards vs. Closed-Loop Prepaid Cards
Generally, an open-loop prepaid card can be used at any location that accepts cards on the associated network. For example, dash is a prepaid Mastercard® that can be used at any of the 40 million retailers worldwide that accept Debit Mastercard. On the other hand, closed-loop cards can only be used at a specific retailer or group of stores. Closed-loop cards may also be used in very specific settings, like on your local public transit system.
Single-Use Prepaid Cards
The single-use prepaid card we’re probably all most familiar with is the closed-loop retailer gift card. It’s available in a pre-set amount and when the balance on the card has been spent, the card can be considered disposable. User information is often not collected for single-use prepaid cards, which makes them quick and convenient. However, this does mean that if the card is lost or stolen, the funds cannot be recovered.
Open-loop versions of prepaid gift cards, like Mastercard Prepaid Gift Cards, are also available and can be used wherever retailers accept Mastercard.
Reloadable Prepaid Debit Cards
Reloadable prepaid debit cards can be used as long and as often as needed, so long as you keep the balance on the card topped up. These are also sometimes referred to as General Purpose Reloadable (GPR) Cards, and some offer extended product features, like mobile expense management, to deliver enhanced value and flexibility. In some cases, you can save a funding source to your reloadable prepaid card account, allowing you to “top-up” card balances on an as-needed basis. In these instances, it’s important to carefully vet the security processes of the card provider to ensure your funds are kept safe and secure.
The dash™ Prepaid Mastercard® provides small and mid-sized business owners with prepaid cards for business and practical, mobile expense management solutions. To find out how dash can simplify your expense management processes for business, request a demo today.