Why Company Debit Cards Are a Must Have Tool For Modern Businesses

Why Company Debit Cards Are a Must Have Tool For Modern Businesses

Why Company Debit Cards Are a Must Have Tool For Modern Businesses

September 30, 2021

Sep 30, 2021

Credit cards can make it easier to manage business finances and transactions. In the UK, there were over 500,000 credit card accounts open in 2020. However, although SMEs make up 99% of all business in the UK, just 13% of SMEs use business credit cards. In fact, an average of 2 in every 10 SMEs that apply for company credit cards are rejected. 

SMEs can be rejected for various reasons, but credit card companies make it hard to apply in the first place. Credit card companies depend on managing and mitigating financial risk, so they use terms and conditions to protect themselves financially in case businesses go bankrupt or default on their payments.

Unfortunately, SMEs are unable to access the benefits of credit cards as a result. Unless, of course, they leverage company debit cards instead. But what is a company debit card, how do they work and how do they help SME finance teams better manage their accounts?

In this article, we’ll explain the benefits of company debit cards and identify why finance leaders are turning to fintechs that partner with debit card companies to support their business.

Why did company debit cards become necessary?

Managing the finances of any business has always been challenging. The endless need to raise funds and invoices, track spending and pay every bill on time (to staff and suppliers) provides finance teams with multiple sources of constant, urgent information. 

Keeping on top of the paperwork at all times is extremely hard. Any methods that can simplify the process for finance teams is essential to maintaining a healthy business.

How company debit cards help

As businesses grow and expand, senior employees often need rapid access to funds. They might need to buy additional materials, settle a bill quickly or get reimbursed for an expense they incurred whilst working for the company. The urgency of the request can cause problems for a small, struggling finance department, often composed of just a few individuals at an SME.

Cards offer a highly convenient solution. Issued to selected employees, cards provide a means to pay costs immediately and account for the transaction later. The employees themselves are responsible for the spending that takes place on the card. 

Company debit card policies

Cards are usually only issued to trusted entities in the business, like senior management. The SME’s rules around who can and can’t get a debit card issued in their name are drawn together and called a company debit card policy. 

Why are debit cards better than credit cards for SMEs?

Company debit cards bypass the risk-related restrictions that exist with credit cards. Unlike credit cards, debit cards don’t use debt to pay for things. As a result, SMEs don’t have to prove to a debit card company that they are a low risk investment. Debit cards don’t have the same level of stringent terms and conditions that keeps credit cards out of reach of SMEs. 

The challenges of running a finance department without company debit cards

There are two major consequences for finance teams that don’t use company debit cards. 

Less time wasted by finance teams 

The longer that staff spend on administrative tasks, the less productive the finance team. Manually filling in ‘Employee Reimbursement Forms’ is especially time consuming, as is the need to execute wire transfers to pay back employees via their personal accounts.

Meanwhile, inefficient reconciliation of accounts can bring about human error which is expensive and frustrating to correct. A PwC report found that bank and supplier reconciliation took up 25% of finance function’s time.

Relying on the finance department to pay for costs creates bottlenecks that can negatively impact your business. Worse still, employees are often unable to benefit from services until deposits are paid. Without cards, getting a payment processed relies heavily on individuals calling in favours from overstretched finance teams.

Cost and cash inefficiencies

Wire transfers often incur costs. Companies that needlessly use wire transfers to send funds could save money by using cheaper card transactions. Additionally, cash payments made in the day to day running of a business might not be properly recorded, leading to significant problems later down the line for finance teams that can take a long time to correct. 

The benefits of using a company debit card

Cards are convenient. You can use debit cards to pay instantly online and in-store using contactless payments. Every transaction is recorded, providing a clear history for finance teams to follow should something go wrong. Finance teams can use transactional history to spot spending trends and can even use new tools to access real-time data.

Company debit cards in particular provide a huge amount of control for SMEs, as the available funds are dictated by the finance department in the first place. Company debit cards that are backed by experienced providers like MasterCard are secure and trustworthy.

Finally, employees benefit from being treated as trusted entities within the business. Issuing senior staff with a card of their own demonstrates your company’s faith in their competence, which can provide a motivational boost.

Company debit cards: Unlocking seamless finance for all businesses

Company credit cards may be hard for SMEs to get hold of due to restrictive terms and conditions. But they don’t need to make their finance teams inefficient as a result.Debit cards offer many of the same benefits as credit cards with less of the risk. SMEs should be especially aware of products that have been designed for modern businesses by innovative fintechs like FinXP.

Streamline your finance management with company debit cards

FinXP is the practical, trustworthy alternative to traditional finance institutions.

We’ve designed our soon-to-be-launched company debit cards to be convenient and affordable, enabling your finance teams and corporate leaders to focus on adding value to your business.

Contact the team at to be the first to receive information on our company debit cards. To stay updated on company and industry developments, sign-up to our newsletter here