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NEW YORK (TheStreet) -- Prepaid debit cards?! Like the Visa (V) - Get Visa Inc. Class A Report or MasterCard (MA) - Get Mastercard Incorporated Class A Report versions I can buy at Wal-Mart (WMT) - Get Walmart Inc. Report? For my small business? Say what?

White-hot, prepaid debit card giant

Green Dot

(GDOT) - Get Green Dot Corporation Class A Report

raked in a cool $164 million from rabid investors when

its stock went public

earlier this summer. Now a flock of third-party startups, looking for the same investor love, are finding traction in financial services that were once strictly for the under-banked -- usually kids and those with low credit scores. These firms are morphing prepaid debit cards into a new generation of innovative financial instruments. And, I'm surprised to say, they're slowly finding real play for small businesses.

One of the most interesting of this new generation of smart prepaid debit card companies is tiny, New York-based

Plastyc

. The four-person firm brands its prepaid debit cards as the UPside Visa Prepaid Card. And through a clever series of co-branding, outsourcing and Web development deals, the firm has recently rolled out a legitimate virtual banking site called

iBankUP

.

I sat down for drinks, and a demo, with company CEO Patrice Peyret last week. And I find though some of Plastyc's services are of limited small-business use, some features are pretty darn attractive.

WHAT YOU GET

Plastyc, though its UPside brand of prepaid debit cards and iBankUP Web portal, offers an easy way to manage the cash employers must extend to employees to do their jobs.

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iBankUP gives firms a fast, secure way to get, say, $50 in the hands of a remote employee without messing with checks, third-party credit cards or crazy-expensive wire transfers such as those found at

Western Union

(WU) - Get Western Union Company Report

.

Plastyc makes handing out money simple. Whoever needs spending money logs into the company website, gives their financial information -- you and your business are not involved, which in these Patriot Act days is a godsend -- and opens an UPside prepaid debit account. A week or so later what appears to be a traditional Visa debit card shows up in the employee's mail. The account is funded either by traditional direct deposits or by re-upping in person, adding cash at any of roughly 60,000 locations nationwide. You also can transfer funds from your cell phone, if it has a data plan. And -- get ready for this -- you can even fund your employees' cards from the UPside

Facebook

page.

Anybody who has had their credit identity trashed because an employee was sloppy with a company credit card knows how fabulous an idea that is.

WHAT YOU DON'T GET

Plastyc, and its UPside brand of prepaid debt cards, are not full-on business finance tools.

As attractive as Plastyc's products might be, they are not substitutes for the real fiscal sinew of a small business, such as checking accounts, traditional revolving lines of credit or merchant bank systems. For one, if you are not careful, Plastyc's products get pricey fast!

Monthly usage charges start at $2.99 a month per card, though that fee drops to 99 cents a month for accounts that have more than $500 in them. Debit or credit card loads cost $2.99 each. Phone support is $2. And it can cost as much as $12 to get your money back out of a card if you want to close the accounts. Yikes!

BOTTOM LINE

I give Plastyc credit: The company is bringing much-needed innovation to small-business banking. For firms looking for new ways to manage cash, this is it. Just don't confuse this product with a serious small-business banking tool.

Still, pay attention to this sector. Somebody soon will optimize the prepaid approach for the small business. It's just that Plastyc is not there quite yet.

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Jonathan Blum is an independent technology writer and analyst living in Westchester, N.Y. He has written for The Associated Press and Popular Science and appeared on Fox News and The WB.