If you’re a business owner, you may be looking for the easiest way to facilitate employee spending. A prepaid card can do just that. You can place your trust in the service rather than the person, removing risk and temptation by using enforceable spending limits instead.
Compare prepaid business cards
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Latest prepaid card reviews
What is a prepaid card for business?
A prepaid card can help business owners provide employees with access to money so they can pay for expenses.
It can be linked to your bank account and quickly loaded with funds online, or using a mobile app. Some cards will also allow you to load funds with cash at PayPoints, a banking branch or other locations, such as the Post Office.
However, you can’t set up direct debits or standing orders, like you would be able to do with a traditional bank account. You are unable to go overdrawn either.
How do prepaid business cards work?
You will usually have to apply for a prepaid card online, as a lot of providers don’t have branches. In many cases, you can complete the application by downloading the associated app onto your smartphone and entering a few basic personal and financial details. The application usually only takes a few minutes and you won’t need to pass a credit check to be eligible for a card.
Once you’ve successfully applied for a card(s), you’ll have to wait a few days for it to be delivered to you. However, most providers will give you a “virtual card” with all the details you need to make online purchases in the meantime. You could also link a virtual card with mobile payment services like Apple Pay or Google Pay.
The prepaid card will be powered by a payment processor like Visa or Mastercard. You’ll be able to use this card with any retailer that accepts card payments from these processors. You can also withdraw cash at any ATM, although fees may apply.
Either way, the transaction will only go through if you have enough money loaded onto your card. If your balance is too low, the transaction will be rejected.
In what situations would prepaid business cards be used?
Prepaid business cards are a useful tool for splitting your business’s funds between multiple people. If each individual had their own prepaid card, the account holder could easily control and ensure they stick to their budgets.
It’s particularly useful if you want to give employees a means of spending, as you may not trust them with full access to your account via a debit card. Prepaid cards also make it easier to track who is spending your business’s money and where.
If your prepaid card offers better overseas spending rates than your bank account, you may choose to only use this while you’re abroad.
How to compare prepaid cards for business
- Fees. You may be charged a delivery fee for receiving the card, plus a monthly account fee. Some cards charge ATM withdrawal fees too, so make sure to compare the potential costs of each card.
- Card limits. Each card will have daily limits on ATM withdrawals. There may also be a daily spending limit, although this tends to be very high.
- Top-up methods. Some cards may let you top up by cash at PayPoints, or online by linking one of your bank accounts. Other accounts may only support a few of these options.
- Overseas rates. A key advantage of prepaid cards is that they tend to offer more reasonable rates for overseas spending. If you plan to use your card in different countries, make sure to compare how much it will cost you to do so.
Pros and cons of using prepaid business cards
- Keeps costs under control. Using prepaid business expense cards can be a great way to prevent your employees overspending on expenses.
- No credit check needed. Prepaid cards can be an easy alternative for business owners who aren’t eligible for standard business bank accounts.
- Split expenses between different employees. If each of your employees has their own prepaid expense card you’ll be able to split your business funds between them.
- No direct debits or standing orders. Prepaid expense cards don’t usually allow you to set up direct debits or standing orders to cover recurring expenses.
- No overdraft features. If there isn’t enough money on the prepaid card, transactions will be declined.
Alternatives to prepaid business cards
If you have previously found it easier to use prepaid cards but now want to do things like set up standing orders or direct debits for your overheads, you may want to think about going a step further and opening a fully fledged business current account.
While previously business accounts had a reputation for being less customer-friendly than personal current accounts, that has changed. In the same way that banking apps and fintech providers have made managing our personal finances more convenient, there are a range of app-only banks doing the same for our business finances.
Like with prepaid business cards, fees between different bank accounts can vary pretty wildly. Business bank account providers are also increasingly competing with one another to offer their customers perks, like discounted or free access to online accounting platforms.
For full details on how business bank accounts work, and to compare the best product for your firm’s needs, check out our business bank account comparison page.
The bottom line
Prepaid cards may not have all the functions of debit and credit cards, but that can be useful for business owners in various scenarios. No wonder more prepaid cards for business are popping up. The costs can vary wildly though, so make sure to shop around for the best deal.
Frequently asked questions
More guides on Finder
5 benefits of having an online business account
Find out how using a digital account with the right connected services can help your business. Paid content
Is Volopa’s business payments platform right for your business? We take a closer look at Volopa’s business solutions.
Business banking statistics
4 in 10 (43%) of UK business account holders have never switched banks and do not intend to switch in 2022.
Revolut Pro review: A business account for freelancers
Our review explores the new Revolut Pro account designed specifically for freelancers, including its cashback offer and instant payment options.
3 benefits of connecting your business bank account to a cash flow insights tool
Find out how a deeper view of your business finances can help you drive growth. Paid content.
Juni business account review
Learn more about Juni’s business account for ecommerce and online marketing entrepreneurs.
Wise business account review
Learn more about the benefits of opening a business account with Wise
SumUp business account review
Find out more about the SumUp business account, including its pros and cons.
Cashplus vs Tide: Which is best for your business?
Find out whether the Cashplus or Tide business account could be the better option for you.
Best multi-currency business accounts
Discover what multi-currency business accounts are, how to get one and whether it’s worth applying for.
Ask an Expert