Prepaid cards are an amazing phenomenon. Their introduction in the early 2000s opened our eyes to the potential of fintech to address payments in ways that traditional banks hadn’t contemplated in the early part of the century. And, the concurrent growth of technical capabilities (cloud, APIs, cryptocurrencies) has created previously unimaginable opportunities to use prepaid cards to address all kinds of payments needs.
Although much of the focus on a prepaid card has involved consumer uses, prepaid cards also have broad applicability in commercial sectors. At Softjourn, we looked at a wide swath of businesses to identify their common pain points—areas in which prepaid could, potentially, cut expenses, improve operations and/or reduce fraud exposure. And, the area that hit all three was expense management.
Many—if not most—companies need to entrust their employees with funds to spend on their behalf. This ranges from expenditures for what used to be called petty cash to paying for business travel, buying fuel, picking up goods and many more situations that require on-demand payment. The question is, how do you empower an employee to pay for goods or services that are essential to your operation and still protect yourself? Cash is out of the question for all the obvious reasons. Checks aren’t convenient or suitable for on-demand payment situations. And, credit cards may not be accessible to all employees, because even some “corporate” cards require credit checks on individual employees.
So, what’s a business to do?
Prepaid Cards: The Solution to the Expense Control Dilemma
Prepaid cards are the perfect solution to the expense control dilemma—provided, however, they include appropriate controls to protect businesses, while giving employees the flexibility to make on-demand payments so necessary business activity isn’t delayed or prevented.
Understanding the market need and the power of prepaid cards, Softjourn pursued a solution that would enable businesses to cut the cost of expense management, improve operations and reduce fraud exposure, while still allowing employees charged with the responsibility to pay for goods and services to do so conveniently.
We created our expense control solution, so our clients could incorporate it in their product and service portfolios—adapting it, as necessary, to the diverse needs of their commercial customers.
Flexibility Is the Key
We understood that our solution needed incredible flexibility to address all the nuances in expense management across different type and sizes of businesses. Clearly, a one-size-fits-all solution wouldn’t be effective. So, that’s how we approached the challenge.
Our solution, based on our Decision Control API, scrutinizes each purchase, based on rules the business establishes to address its own unique control requirements. If the purchase is outside those rules, it’s declined even before it’s passed to the payments processor for authorization.
Our expense management rules include limiting purchase to:
- A particular day
- A particular time period
- A certain dollar amount
- A particular location (using geolocation technology)
- A particular retailer
Rules can be set individually for each card and changed (and changed again) at any time with instant updating. In addition, rules can be combined to create the right amount of control. And, they can include a required check-in by the cardholder prior to initiating the purchase.
The API also can accommodate additional rules to address business’s unique requirements.
The Expense Control Solution at Work
For fun (because we’re developers and this is what developers do for fun), we put ourselves to the test by creating a proof of concept for our expense management solution based on a complicated, yet realistic, concierge car servicing scenario.
Our POC is based on the idea of a concierge auto care business (let’s call it CACB) that enables individuals to book car maintenance services (like car washing, detailing or repairs) online; then dispatches CACB employees to pick up the car from the owner, facilitate and pay for the appropriate service from third-party providers and deliver the car back to its owner, who pays for the service online or using mobile app.
This scenario is challenging because each CACB employee must be entrusted with funds to pay the third party—on demand—for whatever service the car owner needs, so the amount could range from relatively modest for a car wash, for example, to quite high for a significant repair. And, there are a lot of things that could go wrong in the transactional process. The car owner, for example, could make an incorrect selection from the online service menu, which would affect pricing. Or, the CACB employee could make a legitimate mistake in instructing the third-party provider about the service needed. Our solution handled all the exceptions we could throw at it—and worked extremely well in providing the CACB employees with the funds they needed on a prepaid card to pay for the service while protecting CACB from the exposure of its employees misappropriating funds. And, the reporting on the backend gave CACB the business intelligence it needed to streamline its operations.
How Would Your Clients Do With an Improved Expense Control Solution?
Despite its importance, many businesses—maybe even your own—aren’t doing all they can to manage their expenses. And, this could be costing them more than they can imagine. Softjourn has the experience and skills to adapt our expense management solution to any scenario your clients may present. See more here and contact us soon, so we can brainstorm together to create a custom solution that will make you a problem-solving hero to your clients.
