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Virtual Wallet v Pre-Paid Cards

There are lots of similarities between Virtual Wallet and pre-paid cards – such as ease of loading funds, a focus on self-service, ease-of-use for the individual and real-time visibility of the balances on all of the accounts.  There are however significant differences, which means there is a risk of ‘comparing apples-and-pears’.  

Whereas pre-paid cards sit at the end of the DP/PB process and are a great way to pay for ‘something’, Virtual Wallet helps people with the whole end-to-end purchase, payment and management process.  Three key differences associated with this are:   

  • Automated end-to-end process – With a pre-paid card, the individual must check the invoice or payslip that has been generated elsewhere and emailed/posted to them, and then manually create a payment (with the associated risk of errors). As Virtual Wallet is an end-to-end system, the entire process is automated and much more efficient for the individual and the provider. 
  • Elimination of overspend Whilst pre-paid cards offer some safeguards (you can’t pay out funds if you have none left on your card), this does not eliminate the risk of overspend as there is no recognition of accruals (i.e., pending orders and unpaid invoices), which can lead to a misleading picture. Virtual Wallet operates on a ‘commitment accounting’ basis, meaning that the system is automatically checking whether an individual has sufficient funds to cover all of their liabilities. 
  • Reporting and audit trail – A pre-paid card does show the individual or the funding provider what has been paid and to whom. However, the devil is often in the detail.  Whilst Virtual Wallet does ultimately process payments, those payments are calculated on the basis of ‘agreed unit price’ x ‘agreed quantity delivered’.  This means that there is total visibility at line-item level of what has been provided, how many hours, when and at what price.  This removes the need for retention of any other records and eliminates invoice queries.    

We have produced a detailed paper that compares the features and functionality of pre-paid cards with Virtual Wallet.   To request a copy, please get in touch. 

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