Both businesses and customers are trading in their cash for new payment solutions.
Cash use has declined in recent years due to its inconvenience and transferability of germs. In Canada, 57% of people use cash less often than in prior years, and the prepaid card market in the U.S. is expected to grow 6% each year until 2024. The pandemic has accelerated the adoption of electronic payments, forcing companies to shift their payment strategies.
In comparison, touchless options like prepaid Visa cards and mobile apps provide users with on-demand, flexible solutions they can pay with anywhere. Some businesses have been leveraging these methods in innovative ways, passing on spending freedom to their customers and employees.
1. Tourism Incentives
The tourism industry was one of the hardest hit by the pandemic, with small business owners being no exception. Many regions across Canada have struggled to recover, but some have developed creative ways to revive their local economy using free prepaid cards to entice visitors.
Value-added incentives like prepaid cards connect all stakeholders within the tourism industry, including hotels, restaurants, storefronts, and nearby attractions. These programs encourage visitors to see or do more during their stay, making their trip more memorable and increasing return visits.
2. Virtual Events
Multiple surveys have shown that employees prefer a hybrid work arrangement between remote and in-office days. The Business Development Bank of Canada found that almost three-quarters of businesses plan to offer remote work options after the pandemic because 55% of employees surveyed want to continue working remotely. Additionally, Statistics Canada reported that 80% of teleworkers prefer half of their working hours be at home, showing remote work is here to stay.
From startups to large corporations, businesses of all sizes have remained flexible with meeting technologies like Zoom and Microsoft Teams. However, fatigue from constant virtual work is a real concern. Companies that continue work from home policies once the pandemic subsides can provide employee incentives to mitigate this risk. Open-loop incentives will encourage people to attend training sessions, online luncheons, town halls, or webinars, all with virtual prepaid cards.
3. University Per Diem Payments
Universities are also taking note. While many institutions still rely on outdated payment processes for athletics, financial aid and reimbursements, open-loop payments are gradually replacing cash.
Since all transactions are trackable and digitally accessible on cards, university departments benefit from cost savings around reconciliation and budgeting. Providing funds on reloadable cards also promotes financial literacy and accountability among students who learn to track their spending.
4. Employee Recognition
Rewarding your employees for outstanding work has never been easier with prepaid cards. Unlike cheques, which can take several days to process, cards offer instant disbursements and buying power. Gift cards can also be programmed as open-loop or closed-loop systems, enabling them to be used where Visa is accepted or limited to a geographic area or industry.
5. Client Reimbursement
Businesses are increasingly using prepaid cards to reimburse customers because of their convenience and marketing benefits. They allow employers to avoid high cheque fees and capitalize on free advertising with custom card designs. Embossing cards with your logo and brand assets means your clients are reminded of your brand every time they make a purchase. Your one-time investment helps build client loyalty, which is worth much more in the long run.
6. Restaurant Tips
Cash tips were popular in the past, but tracking and distributing them is tedious. Handling physical currency can also be a security risk. With new prepaid payment methods, servers receive tips each night on their prepaid card that they can spend online or in-store. Servers benefit from convenience while restaurant owners enjoy a secure, seamless method of transmitting payments. Prepaid’s a win-win.
7. Loyalty Rewards
Lastly, prepaid cards are an exciting frontier for loyalty rewards programs. More traditional reward methods involve collecting points, which can be inconvenient due to their limited spending options. Prepaid, however, gives customers spending freedom with real funds.
