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How to Choose a Payroll Card Provider

To address payday challenges for the more than seven million U.S. households without a bank account, companies have increasingly turned to payroll cards, which enable employers to direct deposit employees’ wages onto reloadable prepaid debit cards.

A best-in-class payroll card program has many employer advantages and employee benefits. Here are questions a company should consider when choosing the right payroll card provider.

Does the payroll card system require new software?

Inquire if the payroll card system will require purchasing new software or add-ons. If that’s the case, determine what training, costs, resources and time will be associated with it. Asking these questions can also provide information on how long the start-up and implementation process will take.

What payroll card fees will the company or employees incur?

Fees can vary depending on the issuing financial institution and card network. Ask about fees for ATM withdrawals, cash back with purchases, balance inquiries and replacement cards. There should be no monthly fee, and there should be no inactivity fee while the employee is still receiving wages on the card. All fees should be clearly outlined in your contract.

What experience does the company have with payroll cards?

Between 2015 and 2019, adoption of payroll cards grew from 2% to 30%, and with that came more organizations providing those payroll cards. Most low-cost payroll cards are Visa® or Mastercard® and are issued through banks or other financial institutions. However, not all are equal. It’s important to work with an organization, like Commerce Bank, with extensive experience in the field. Commerce Bank serves more than 350 clients and has been providing payroll card services for nearly 20 years.

What type of customer support do you provide?

Ask about customer service availability for the company and its employees. Is there online or phone support 24/7/365? Is it live or automated? Are bilingual options available? Is there an app associated with the card and a way for employees to get support through it?

What is your process for lost or stolen payroll cards?

It’s a matter of time before an employee loses a payroll card or one is stolen. Find out how the issuing financial institution handles these situations. Some have opt-in programs for instant issue replacement cards so it’s good to find out what the costs are for that option. Ask about “zero liability” protections for unauthorized purchases for lost or stolen cards.

For key elements of a good payroll program plus other best practices, see Consumer Action’s An Employer’s Guide to Payroll Cards.

Learn more about the CommercePayments® DirectCheck Card.

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