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Tag: "Pre-Paid Credit Cards"

Paying Staff Without UK Bank Accounts – Pre-Paid Credit Cards

Pre-paid credit cards are becoming a genuine benefit to companies that pay staff who do not hold UK bank accounts.With the world borders breaking down for workers, paying foreign nationals has become increasingly difficult for payroll departments.The card is ‘topped-up’ with the employee’s wages each pay period and the employee is then free to spend the money wherever credit cards are accepted or to transfer the cash to another account.

The market place is flooded with these new types of credit cards and choosing the right one for your business and work force can be a minefield.

Pre-paid cardholders have been warned that they may not be eligible for compensation if their provider collapses.

The cards have become popular in recent years as those who can not open traditional bank accounts can use them to pay for goods without the need for cash, while holidaymakers also find them useful overseas.
However, pre-paid cards are not covered by the Financial Services Compensation Scheme, which awards funds to customers who have lost out when their provider collapses.

Annie Shaw, finance expert, told The Sun: “As we move increasingly towards a cashless society, pre-paid cards are growing in popularity.
“I advise customers to check the provenance of the card issuer and how their money is held. And what, if any, their compensation rights would be if the card issuer defaulted.”
Certain pre-paid cards such as the Caxton FX and Tuxedo card are backed by Newcastle Building Society, giving customers a chance to gain compensation.