Prepaid card company PEX Card, which offers a prepaid Visa expense card to small and medium-sized businesses, has picked up another round of funding, with a $3.2 million Series B. The round was led by existing investor iNovia Capital and new investor Bluff Point Associates. Also participating in the round were Augury Capital and other private investors. With the additional financing, PEX Card has raised nearly $5 million to date.
With PEX Card’s solution, businesses can add funds to employee’s cards in real-time, as well as set limits on how and where staff can spend their assigned budgets. The management and oversight of the distributed cards is available through a custom online dashboard, where business owners or admins can track balances, add or remove funds, suspend cards, or even drill down into individual cards to view the transaction details.
Founder and CEO Toffer Grant explains what makes PEX Card notable. “The traditional method for companies to issue a card to an employee is with a credit card, so even Amex charge cards have some element of short-term credit that’s being issued to a business,” he says. “In our model as a prepaid debit card, the company has to fund the amount of money they want to have on deposit for employee spend ahead of time. In essence, they’re self-crediting,” Grant says.
Because PEX’s prepaid cards can be issued inactive, there are no requirements in terms of minimum funding requirements. Once a card is issued through the administrative dashboard, recipients will receive their card in 7 to 10 days, the company says. PEX works with Bancorp Bank in issuing the cards, and when they’re active, businesses can use the online dashboard to manage adding and removing funds in real-time.
Grant declined to give a hard number in terms of PEX Card customers, but says there are “thousands” of small to medium-sized businesses using the service today. Many of these companies are in the transportation space, as much of their workforce is in the field. Since its public debut in 2009, PEX Card has processed over one million transactions, and it now services businesses in 50 states across the U.S. It has also achieved a 65% increase in transaction volume to date in 2012.
The company recently added new hire Michael Noles as Chief Marketing Officer. Noles previously worked in Advanta’s business credit card division, as well as at JP Morgan Chase’s small business card unit. He also held senior positions at Citibank and FleetCor. Grant notes that there are a lot of people who were credit card marketers and are now moving into other areas of payments, but finding someone with deep experience in SMB-focused marketing is still kind of tricky because of the fragmented market.
With the additional funding, PEX Card will be working to raise awareness and scale the business. A lot of people still think of “prepaid” as a consumer-facing, niche product, Grant says. His team will be working to change that.
Also in the works are plans to hire up on the tech and operations sides, and, as always, plans to continue to iterate on the product. Right now, they’re putting the final touches on smartphone applications, says Grant, which will be the next major product release for PEX. However, there’s no ETA on that just yet.