Top 6 Employee Benefits of Payroll Cards.
In the mid-1970s, businesses were embracing technology and using it to automate processes and create efficiencies. One emerging idea was direct deposit — paying employees by electronically transferring wages directly into their bank accounts rather than issuing paper checks.
Today, 94% of Americans are paid through direct deposit. However, in 2019, there were more than seven million U.S. households without a bank account. Through employer-issued payroll cards, these employees can still take advantage of direct deposit.
Payroll cards are typically Visa® or Mastercard® reloadable prepaid debit cards. Employers can load wages onto the payroll cards via direct deposit and employees can have immediate access to earnings on payday — just like they would if they had a bank account.
Payroll cards offer many other benefits to employees:
1. Avoid check-cashing fees:
With immediate access to their earnings on a payroll card, employees without bank accounts can avoid taking their paychecks to check-cashing facilities where they may pay 1% to 10% of a check’s value in fees.
2. Shop anywhere, anytime:
Since payroll cards are debit cards, employees have an option they didn’t have before — making online purchases. With a payroll card, they can enjoy the convenience and advantages of shopping online, like product variety, availability and prices for everyday items like groceries, household goods and school supplies.
3. Save money:
Once employees cash a paycheck, they have to figure out how to pay bills with cash. Most rely on money orders, which can cost from $1.25 to $5, must be purchased in person and can come with stipulations such as maximum amount. With a payroll card, employees can avoid the fees and inconvenience of money orders and take advantage of online bill payment offered by most landlords, leasing agencies and home loan and utility companies.
4. Manage money:
Many payroll cards come with apps that enable employees to monitor their account balances and transactions, and receive account statements. Employees — not employers — can access information such as transaction history, balances and purchases on payroll cards.
5. Access cash:
The prepaid debit card allows employees access to withdraw cash at nationwide ATMs. Usually there is a list of in-network ATMs online on the app.
6. Protect money:
If an employee reports a lost or stolen payroll card, the issuing financial institution will deactivate it and issue a replacement card. Depending on the company’s payroll card program, an instant issue option may be available that enables employees to get a replacement card immediately. Usually there are “zero liability” protections for unauthorized purchases for lost or stolen payroll cards.
Learn more about the DirectCheck Card.