Corporate Cards, Fuel Cards, or Mobility Cards: What is the Optimal Solution for Employee Benefits? An Overview

There are now numerous solutions for corporate cards: mobility cards, fuel cards, closed-loop cards, open-loop cards, corporate cards. But which one fits the company and is best suited for employees?

The underlying offers serve a variety of use cases. Due to the large diversity and many small but significant differences, it is not easy to decide which card is suitable to meet both employee and company needs as optimally as possible.

We provide an overview of the different corporate card solutions and highlight the differences.

Corporate Cards, Fuel Cards, Mobility Cards, and More as Employee Benefits

Which solution is best suited to reward employees and strengthen their bond with the company? The variety of corporate cards offers numerous possibilities, from corporate cards to fuel cards to mobility cards. These benefits can not only supplement salaries but also increase employee satisfaction. By offering these practical cards, companies show appreciation and promote motivation in everyday work. The costs for these additional benefits are present but pay off through increased employee retention and a more attractive employer image. Attracting and retaining new talent becomes easier. It is important to consider the individual needs of employees and offer the appropriate card solution accordingly.

Corporate Cards or Company Cards

A corporate card, also known as a corporate credit card or (prepaid) company card, is a special credit card that companies can issue to their employees to cover business expenses such as travel costs, hotel bookings, business meals, or various other expenses incurred by employees.

Company cards differ from personal credit cards in that they are usually registered to the company and not to individual employees. Some card providers also offer company cards registered to employees. Since companies provide the cards and take responsibility for billing, employees do not need to pay upfront. Companies can monitor all transactions directly, set spending policies and budgets, and block cards in case of misuse. Corporate cards aim to minimize the administrative effort for expense processing and accounting.

How Do Corporate Cards Work?

Corporate credit cards work fundamentally like regular credit cards. However, companies can tailor individual features and functions to corporate needs. After issuing corporate cards to employees, they can use the card like any other credit card. The travel expense managers in the company receive an overview of the expenses incurred by their employees. Most corporate card providers also offer an online backend for card management, where companies can set spending policies, set limits, or temporarily block cards.

There are two common billing models for corporate credit cards:

  1. Centralized Billing: Travel expense managers receive a monthly statement of all transactions with the associated receipts. The expenses are debited directly from the company account.
  2. Individual Billing: All card users receive their own statement of their personal card. After checking the receipts and approval by the accounting department, the expenses are covered by the company account.

What is the Difference Between Closed-Loop Cards and Open-Loop Cards?

Corporate cards are differentiated between so-called closed-loop cards and open-loop cards.

Closed-loop cards can only be used at selected acceptance points, such as gift cards in the stores of the card provider. A gift card issued by a retail chain can thus only be redeemed within that retail chain.

There are also semi-open-loop cards that can be used within a limited acceptance area. These can be, for example, gift cards of a shopping center or an outlet mall, which are accepted by the various retailers within that network.

In contrast, open-loop cards can be used at almost all acceptance points. Open-loop cards are usually Visa cards, MasterCard, and American Express cards.

For companies that want to offer their employees specific benefits, closed-loop cards can be a targeted option, for example, for purchasing work materials. Open-loop cards, on the other hand, offer employees greater flexibility and independence in using the benefits. The decision between the two types of cards thus strongly depends on the individual needs and goals of the company—whether the focus is on cost control and targeted employee offers or on maximum flexibility and usability of the benefits by the employees.

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Fuel Cards

As the name suggests, a fuel card is a credit card that employees can use to pay cashlessly at gas stations. These cards enable not only cashless and contactless payments but also automatic billing via the company account, so employees no longer need to collect fuel receipts and submit them to fleet management or the finance department. This saves not only time but also costs overall.

Fuel card providers are usually oil companies or specialized benefit providers that collaborate with a network of gas stations. Besides fueling, some of them also cover other services, such as car washes, toll fees, or the billing of roadside assistance. In addition to the digital processing of fuel receipts, fuel cards allow fleet managers to evaluate employees' fueling behavior.

Fuel cards are an extremely practical option for field staff who are regularly on the road and need a reliable way to bill their fuel costs. But they are also suitable for employees in rural areas. This specific type of card allows employees to pay cashlessly within a network of gas stations, efficiently tracking their expenses. By using fuel cards, companies can not only simplify the management of expenses but also minimize potential errors in billing. Moreover, fuel cards create a clear separation between private and business trips, which is beneficial for both the employer and the employee. Providing fuel cards as an employee benefit can thus help increase employee satisfaction and strengthen their bond with the company in the long term.

What Types of Fuel Cards Are There?

Classic fuel cards work like an analog chip card or credit card. However, there are now mainly digital fuel cards in the form of a virtual prepaid card or virtual credit card, which can be used via the smartphone or an app provided by the issuer. Mobile payment has proven itself with fuel cards, as digital fuel cards often involve a complete automation of the fueling process. Fuel pumps can be activated directly via the app, allowing the vehicle to be fueled even outside the gas station's opening hours.

Cards for Charging Electric Cars

For employees who use an electric or hybrid car, there are now also special charging cards that can be used at charging stations. The advantage of these cards is that employees can charge their electricity everywhere at a fixed rate.

Combination of Fueling and Charging - The Hybrid Card

However, many fuel cards have two disadvantages. On the one hand, they are usually limited to the gas stations of a single provider. On the other hand, they only enable fueling of combustion cars. In the future, however, more electric cars will be added. For companies, a combination of fueling and charging is therefore increasingly worthwhile. So-called hybrid cards combine fueling and charging on a single card. They also typically offer a dense network of gas stations and charging points. This allows employees to always find the cheapest gas station nearby. Ultimately, this eliminates the management of multiple cards from different providers, saving costs and time compared to conventional fuel cards.

Mobility Cards to Promote Sustainable Employee Mobility

Mobility cards are virtual prepaid cards that can be used for mobility services. They are loaded with a balance—a so-called mobility budget—by the company every month, giving employees freedom and flexibility in their mobility choices by enabling access to all forms of mobility.

Unlike a fuel card, the mobility card is multimodal, offering a wide range of options: In addition to public transport, employees can use the card for car sharing, scooters, and bicycles, or use the card balance for parking, fueling, or electric charging. Employees choose the most suitable mode of transport for each trip and can pay for it with a mobility card. In addition to paying for public transport tickets or sharing services, some providers also offer the option to lease a company bike through the mobility card or to subscribe to a car.

Companies can easily utilize the tax advantages of non-cash benefits and the tax exemption of public transport with a mobility card, offering their employees an attractive and tax-free mobility benefit.

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Flexibility and Individuality: Which Card Best Suits the Needs of Employees?

Which card best suits the needs of employees depends on various factors. Not every employee has the same requirements for a benefits program. A young start-up with many commuters may place more value on mobility cards, while an established company with many business trips or field employees might benefit more from fuel cards. The ability to consider individual needs plays a crucial role in choosing the right solution. Employee retention and satisfaction can be increased through customized benefits. Companies should carefully examine which card brings the most benefit to their employees while keeping costs in mind. A careful balance between flexibility and efficiency is essential for the long-term success of the employee benefits program.

Tax Aspects of Providing Benefits Through Company Cards

Tax aspects play a significant role for employers and employees when providing benefits through company cards. The tax treatment of corporate cards, fuel cards, or mobility cards can impact employees' salaries and financial situations. It is important to consider the tax implications when introducing such employee benefits to avoid unwanted costs.

Companies must ensure they comply with legal requirements and provide transparent information to their employees about possible tax impacts. Through careful planning and consultation, employers can ensure that providing corporate cards as a benefit is advantageous for both the company and the employees. Taxes should therefore be considered an important factor in deciding on the optimal solution in the area of employee benefits.

Fuel cards or mobility cards, for example, can be provided through the 50 Euro non-cash benefit.

Conclusion: The Optimal Solution for Employee Benefits - An Individual Decision!

When choosing the optimal solution for employee benefits, it is crucial to consider the individual needs and preferences of employees. Each company has different structures and goals, which can also affect the selection of corporate cards, fuel cards, or mobility cards.

While fuel cards, for example, are a practical option for field staff or can complement the fleet, mobility cards can help promote sustainable employee mobility and support a comprehensive corporate mobility strategy. The flexibility and individuality in deciding on the right card also play an important role.

By considering tax and security aspects, companies ensure not only financial benefits but also protection for their employees. Ultimately, the choice between corporate cards, fuel cards,

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Stefan Wendering
Stefan is a freelance author and editor at NAVIT. Previously, he worked for startups and in the mobility sphere. He is an expert in urban and sustainable mobility, employee benefits, and New Work. In addition to creating blog content, he also produces marketing materials, taglines, and website content, as well as case studies.
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