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Thread: Prepayment Debit cards

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    Senior Member chubbchubb's Avatar
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    Prepayment Debit cards

    Just looking at the practicality of setting up prepayment debit cards for each of our sections to save them having to put expenses in each term. Does anyone use these and have any tips or know which are the best to use for charity purposes? TIA

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    The unpaid help ASLChris's Avatar
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    Why not just have a quick expenses repayment process?
    Chris Hawes, District Media Manager, Watford North Scout District and Watford Scouts; Group Treasurer and Webmaster, 9th North Watford Scout Group.
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    Quote Originally Posted by chubbchubb View Post
    Just looking at the practicality of setting up prepayment debit cards for each of our sections to save them having to put expenses in each term. Does anyone use these and have any tips or know which are the best to use for charity purposes? TIA
    We have considered their use in the past. However, there are some real problems.

    From a financial control point of view, they are equivalent to handing out cash. There is no dual authentication on any spending, so you have to treat it as if you were giving a cash advance.

    You still need to collect in all of the receipts and maintain an audit trail on all the expenditure (the statement from the card is not sufficient evidence). If you go down this route, you should prepare your treasurer for dealing with a 'big bag of receipts' at the end of the term.

    Our treasurer will only sanction the use of a pre-payment card for giving a cash advance for something like a camp where the leader does not have a credit card that they can use. So far we have not had to do it.

    If you are techie enough to run a pre-payment card, I would say it would be better to set up an online expense claim system with BACS payments. We use a Google Form + CAF bank BACS payments. Expenses can be claimed immediately and are usually paid within a week - long before the credit card is due. No need for cash advances.

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    Senior Member dasy2k1's Avatar
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    Yep our system os very simple.
    Either we pay and email the recipt to the treasurer, paid back within a day or two by bank transfer.

    Or for big payments where the leader cannot afford to do that then they phone treasurer with the amount, treasurer phones any other signatory and the amount can be wired there and then allowing the leader to pay with their own debit card (of course if the expense being paid for can take a bank transfer like most campsites now then we cut out the middleman)

    Personally I have a high enough limit that I can simply put expenses on my credit card and provided I'm paid back before the bill is due it's all good (and we are fast enough that is never an issue)

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    Escouts Team Bloory's Avatar
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    We use FairFX corporate cards and would not be without them. They waive most of the cost and we have a pool of cards
    Jonathan Bloor
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    We are also about to start using FairFX. We had a problem getting the cards issued, but we will start using them after the half-term.

    The points about the need for dual-authorisation are mis-placed in my opinion. The requirement for dual-authorisation applies to bank accounts; and this is applied when the card is topped up (actually, when the group of FairFX cards are topped up).

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    Quote Originally Posted by garethhowell View Post
    The points about the need for dual-authorisation are mis-placed in my opinion. The requirement for dual-authorisation applies to bank accounts; and this is applied when the card is topped up (actually, when the group of FairFX cards are topped up).
    That was my point exactly. Because the dual-authorisation is applied when the card is topped up, it has to be treated as if you were handing the leader cash - i.e. once the money is on the card there are no controls in place on any spending. I am not saying that this is good or bad, it is just worth being aware of.

    The problem with cash is that some leaders are less careful about keeping the required paperwork because they themselves are not going to be out of pocket if they don't keep the receipt.

    If you happen to be in the position of all your leaders being very diligent about their paperwork there will not be a problem. If you happen to have a leader that is hopeless at keeping paperwork, be prepared for lots of pain trying to sort out the accounts at the end of term.

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    Quote Originally Posted by Bloory View Post
    We use FairFX corporate cards and would not be without them. They waive most of the cost and we have a pool of cards
    Quote Originally Posted by garethhowell View Post
    We are also about to start using FairFX. We had a problem getting the cards issued, but we will start using them after the half-term.

    The points about the need for dual-authorisation are mis-placed in my opinion. The requirement for dual-authorisation applies to bank accounts; and this is applied when the card is topped up (actually, when the group of FairFX cards are topped up).
    Sounds like exactly what we need for making international trips easier on leaders c/cards. Thanks for the tip. Was there anything specific you did to get them to "waive most of the cost"? Eg a charity/nonprofit route? Also are you easily able to transfer unspent funds back out as GBP to a bank account?

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    Escouts Founder Richard's Avatar
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    Quote Originally Posted by hippysurfer View Post
    That was my point exactly. Because the dual-authorisation is applied when the card is topped up, it has to be treated as if you were handing the leader cash - i.e. once the money is on the card there are no controls in place on any spending. I am not saying that this is good or bad, it is just worth being aware of.

    The problem with cash is that some leaders are less careful about keeping the required paperwork because they themselves are not going to be out of pocket if they don't keep the receipt.

    If you happen to be in the position of all your leaders being very diligent about their paperwork there will not be a problem. If you happen to have a leader that is hopeless at keeping paperwork, be prepared for lots of pain trying to sort out the accounts at the end of term.
    Its simply not true that there are no controls. You can limit payment amounts for single payments and monthly limits. We use cards through Unity Bank, via Lloyds and we would struggle without them now.

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    Escouts Team Bloory's Avatar
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    We got in touch and they waived all the fees, bar about £8/ a card.

    We have good visibility over spending, can freeze cards, move balances etc.

    The way we work is most cards have a small balance, if additional is required, approval is sought (usually by email) and the balance moved by the treasurer from the "pot" at FairFX to the individual card.
    Jonathan Bloor
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    Group Scout Leader - 4th Ashby de la Zouch

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    Quote Originally Posted by Bloory View Post
    The way we work is most cards have a small balance, if additional is required, approval is sought (usually by email) and the balance moved by the treasurer from the "pot" at FairFX to the individual card.
    Thatís how we operate ours as well.

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    Quote Originally Posted by garethhowell View Post
    That’s how we operate ours as well.
    Out of interest, how good are your leaders at ensuring the receipts for all expenditure make it back to the treasurer?

    - - - Updated - - -

    Quote Originally Posted by Richard View Post
    Its simply not true that there are no controls. You can limit payment amounts for single payments and monthly limits. We use cards through Unity Bank, via Lloyds and we would struggle without them now.
    True, but you can't prevent the money from being spent on the wrong thing. Just like cash.

    So, if you load the card up to pay for a tent you can't stop the leader from paying the bar bill for the leaders meeting.

    I am not saying that they are a bad thing, quite the contrary, I think they are much better than cash - but they are less controlled than either paying invoices directly (I know this rarely possible) or refunding a leader through an expenses system (where you could turn down the repayment if it was not authorised).

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    Escouts Team Bloory's Avatar
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    Quote Originally Posted by hippysurfer View Post
    Out of interest, how good are your leaders at ensuring the receipts for all expenditure.
    The leaders are quite good, not sure about the GSL though!
    Jonathan Bloor
    Escouts Team
    Group Scout Leader - 4th Ashby de la Zouch

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