Say the word “prepaid” and the image that may spring to mind is one of, say, a phone card, or perhaps another card, commonly used by the underbanked individual. That image would be an erroneous one, and for one company in Europe, Prepaid Financial Services, the corporate prepaid market has been an area marked by rapid growth. Founded in 2008, the company has put down roots in nearly two dozen markets outside its home base in the United Kingdom.
In an interview with PYMNTS, Noel Moran, who is the chief executive officer of Prepaid Financial Services, offered insight into the long-term trends driving corporate prepaid adoption, especially in greenfield markets across Europe.
Trends Driving Corporate Prepaid Adoption
Prepaid solutions are growing in Europe, says Moran, as the view of prepaid in general is shifting away from a “subprime” mindset that may carry negative connotations, and toward a technologically advanced platform that can help a range of enterprises manage time and money more efficiently. “This can be evidenced by the many governments and government organizations looking to use prepaid to solve a problem or create an efficiency,” according to Moran.
That includes governments – and of course corporate clients — being able to monitor employee spend in real-time fashion, and for Prepaid Financial Services, the demand comes through the company’s “current account” offerings in both the United Kingdom and International Bank Account Number (IBAN) services throughout Europe. Across those platforms, says Moran, “we can provide real time money in and out, and faster payments to any organization. We can now effectively turn any wallet into a bank account.”
For corporate clients seeking to operate with greater visibility into, and oversight of, corporate and employee-driven expenses, the prepaid solution may be an ideal one. Moran notes that corporate prepaid platforms are scalable and can be customized, with an eye on lowering administrative costs and improve reconciliation activities at the backend – all in real time fashion, and with the elimination of paper-based and time-consuming processes.
Corporate prepaid cards, says Moran, such as those offered by his company, “can be managed via fully customizable Web-based platforms that can allow companies to issue and load cards online.” And they can be viewed, in a sense, as being universal: Among the greatest benefits to prepaids is that they can be issued to any employee, contractor or government/corporate agent without a credit check. “We are seeing that for some companies, the ability to issue payments on the spot to their employees is critical, and this can be provided by instant issuance prepaid solutions,” notes Moran.
Continuing on the theme of technology, digitization of cards and payments is a trend that allows for greater prepaid adoption alongside ease of use, adds Moran. In industries that span the gamut from airlines to travel and hospitality, businesses are now able to pay suppliers in domestic, or other, currencies.
Vendor Landscape Evolution
As technology has evolved, so too has the corporate prepaid landscape, says Moran. The key driver here has been transparency – “the need for real-time accounting, real-time visibility of transactions and balances and the ability to restrict spending and access to cash.” One area of change is that the landscape now includes smaller players outside of realm of traditional finance. Speaking of Prepaid Financial Services, Moran says that “we are the only non-bank entity in the U.K. that facilitates real time current account switching to a prepaid card.”
In one initiative that showcases the increasing penetration of prepaid into Europe, Moran points to a rollout of his company’s first prepaid MasterCard program in Latvia. “We had been observing the Latvian market for a while,” notes the CEO, stating that the country is “relatively underserved with prepaid products,” which led Prepaid Financial Services to partner with WestStein SIA, a local financial services provider. Through that partnership, the MasterCard prepaid has been launched with an eye on all consumers in Latvia, along with corporate users. “We are providing a corporate solution that is suitable for bonus disbursements and management of company expenses, corporate travel, reward and loyalty programs,” says Moran. Ultimately Prepaid Financial Services will look to add on new products and services to create what Moran terms “a more comprehensive banking alternative.”