Prepaid cards have been mostly common in digital goods such as digital gaming or products targeted at customer segments that lack credit cards such as teenagers.
PEX Card has started issuing prepaid cards to small and medium-sized businesses, an overlooked market segment but a logical choice.
Founder and CEO Toffer Grant explains what makes PEX Card notable.
“The traditional method for companies to issue a card to an employee is with a credit card, so even Amex charge cards have some element of short-term credit that’s being issued to a business,†said Grant. “In our model as a prepaid debit card, the company has to fund the amount of money they want to have on deposit for employee spending ahead of time. In essence, they’re self-crediting.â€
Because PEX’s prepaid cards can be issued inactive, there are no requirements in terms of minimum funding requirements. Once a card is issued through the administrative dashboard, recipients will receive their card in 7 to 10 days, the company says. Businesses can add funds to employee cards in real-time, as well as set limits on how and where staff can spend their assigned budgets. The management of cards that have been distributed is available online, where business owners can track balances, add or remove funds, suspend cards or even view individual transaction details. An additional benefit of the PEX card is the funds never leave the possession of the company, so if an employee leaves the company, there’s no effort required to get the funds back.
Many people still think of “prepaid†as a consumer or niche product, but Grant says there are “thousands†of small to medium-sized businesses using the service already. Many of the companies are in the transportation space where their workers are constantly in the field.
Since their public debut in 2009, PEX Card has processed over one million transactions, and now services businesses in 50 states across the US. They’ve also achieved a 65% increase in transactions so far in 2012.