Earlier this month the tech press was alight with news that Samsung was entering the financial sector with its own “innovative” virtual debit card. Prepaid debit cards may not seem like the most exciting technology advancement, but virtual cards are already changing how we pay for goods and services and Samsung’s decision to enter the marketplace demonstrates how important the sector has become.
Apple has offered a credit card to its customers for more than a year and with Huawei and Google both believed to be working on their own payment cards it is no surprise that Samsung also wanted to be in on the game. As smartphone sales plateau, technology firms are looking to expand their portfolio, and with many of these companies already offering financial services through the likes of Apple Pay and Google Pay, it should come as little surprise that they would want to move further into the space and take a larger slice of the fees on each transaction.
Few technology companies would appreciate regulatory burdens imposed on financial institutions like banks. However, offering prepaid cards or credit cards comes with less red tape and are therefore a much more attractive proposition. And prepaid cards are already popular with both businesses and consumers due to their flexibility and security.
For businesses, virtual prepaid cards allow firms to easily track spending on company cards whilst also reducing the risk that an employee with such a card might overspend or lose the card. Virtual cards means employees do not need to worry about forgetting the card when they need to expense a purchase, and the tracking makes it far easier to administer such cards than the administration of filing and tracking expense claims.
Meanwhile for consumers, virtual prepaid cards offer an added layer of security by allowing people to spend with the ease of a debit card without exposing their real card details when buying online from an unknown ecommerce store. Some challenger banks in the UK are also starting to offer prepaid cards as addons for bank accounts, so that parents can give their young children cards to pay for items in today’s cashless society without the risks of setting them up their own accounts and limiting the amount they can spend.
The idea of prepaid cards may have been around for years, but today’s virtual cards offer the added ease of phone payment and transaction tracking that makes them more useful than ever. It’s little surprise tech companies want in on the action.