Payment has been a major element of financial management in organizations, and businesses of all sizes focus more on having a seamless, error-free, and reconciled payment system. Corporate cards play a crucial role in this phenomenon. Although both debit and credit cards have advantages and offerings that later pave the way for financial growth, in this blog, we will discuss the host of features and benefits that business debit cards can offer.
A business debit card is an efficient payment tool that allows the accessibility of funds from business accounts to make any purchase, and they are also used to withdraw funds. Business debit cards are the best payment option for entrepreneurs who follow the rule of sticking to the availability of funds in their accounts and don’t want to indulge in the extravaganza of credit lines. Such cards are engraved with the logo of their respective providers, be it Visa or Mastercard.
There are different business accounts, according to which the features and advantages of debit cards vary. Let us first have a rundown of such business accounts:
- Business checking account: this is the most common type of business account used for daily business banking transactions. The basic functions such as debit cards can perform withdrawing cash, making payments, and managing overall expenses.
- Business savings account: focused accounts for businesses who want to save earnings and store funds to gain interest. It is less common that such accounts provide debit cards, but even if they do so, they can be used only for cash withdrawals.
- Business money market account: is similar to savings accounts, but they can hold large amounts of funds with higher interest rates and limited transactions. They also provide debit cards in some instances but for limited funds access.
Some other types of payment cards that are used in the corporate sector are:
- Business prepaid cards- are loaded with a predetermined amount of funds and integrated with the assigned person’s spending limits. Organizations apply to financial institutions to issue such cards so that employees don’t have to go through the arduous reimbursement process, and the expense is also under check.
- Corporate expense cards- are mostly used by bigger and more established companies who want to optimize their cash flow management by segregating funds for a few officials who can make purchases and make a few financial decisions on the company’s behalf. But these cards are also synced with the specified spending limits and expense tracking features.
- The business line of credit- the financial institutions assign a revolving line of credit for businesses to use in case of urgency of funds. Debit cards are allotted for purchases or cash withdrawals to access these funds.
From the categories mentioned above, it is evident that the attributes of debit cards depend directly on the type of business account associated with it. So, instead of pondering which debit card suits you best, narrowing down the type of business account you want to acquire is better. The following list of questions will help to draw a better conclusion:
What are the associated fees?
- Business accounts have multiple fees, such as annual processing fees, ATM fees, monthly maintenance fees, wire transfer fees, cash handling charges, etc.
- Even for a free business account, there are certain hidden fees, but there are also ways to bypass them.
- You need to check what expense you can bear for a smooth banking facility and what tricks you can use to avoid minor charges.
What is the permissible limit of transactions?
- It is the most crucial aspect that can alter the course of all future business transactions through any business account.
- The predetermined limit for daily transactions, withdrawals, purchases, monthly limits, etc., can hugely impact any organization’s overall financial operations and business growth.
Is there an availability of a physical branch to deposit cash?
- Even if you prefer digital-only banking facilities, there are situations where you have to deal with hefty cash received from different clients.
- In that case, you will select a banking facility that allows you to deposit cash in their physical branch. So, instead of choosing digital-only platforms, you can keep your options open.
Does the bank provide a strong ATM network?
- For a hassle-free cash withdrawal process, banks must provide an active network of ATMs worldwide because this can hit the wallet hard if there are extra expenses for using ATMs in foreign transactions.
- Although banks reimburse the amount sometimes, but can’t be true for all the providers.
So, consider debit cards as one of the prominent financial products that can be leveraged to run business operations smoothly and manage cash flow efficiently. But always extensively investigate the pros and cons of debit cards associated with the respective business accounts.