WASHINGTON--(BUSINESS WIRE)--Payroll cards are on the rise in the U.S. In 2014, six million employees in the U.S. received their wages via payroll cards – and that number is expected to double by 2019. Payroll cards are a popular alternative to paper checks because they save employees and employers time and money. Rather than printing and mailing a paper check or requiring employees to pick up checks on pay day, employers can electronically deposit funds onto a card. This is an especially popular option for the nearly 68 million Americans who are unbanked or underbanked and may not have a checking account to which they can directly deposit wages.
“More employers are recognizing the value of payroll cards, both in terms of serving their employees better and also making their businesses more efficient,” said Brad Fauss, President and CEO of the Network Branded Prepaid Card Association (NBPCA). “Not only do employers save money by cutting the administrative costs associated with distributing paper checks, but employees also save time and money by promptly receiving their wages on pay day and avoiding check cashing fees. While payroll cards are an especially appealing option for those without access to a full checking account, they increasingly are being used by consumers of all ages and income levels to help them better manage their money. Some use their payroll cards as a designated account for bills and expenses, while others may use the card as a way to store money for an upcoming trip or big-ticket purchase.”
For employees, payroll cards come with many benefits. These cards can help employees:
- Save money. It is estimated that employees can save between $150-$200 per year when selecting payroll cards instead of relying on a check cashing service or enrolling in a basic checking account.
- Access funds without a bank account. Whether workers are hesitant to give out bank account information or they do not have access to a checking account, payroll cards help workers ensure they still have immediate access to their wages. There’s no need to deal with a paper check or worry about carrying large sums of cash. Additionally, payroll cardholders have fee-free access to their full wages at least once per pay period.
- Manage funds. Many prepaid cards, including payroll cards, have built-in features that help users manage their money, including budgeting tools and online or mobile access to keep track of where funds go.
- Use funds right away. Once disbursed to a payroll card, wages are available immediately. Employees don’t need to be in the office to collect their checks and, better yet, they don’t have to wait to cash a check and then spend valuable time or additional funds to make electronic payments or pay bills.
- Use them (almost) everywhere. There’s no need to stop at the ATM before grocery shopping or paying bills. Payroll cards can be used wherever debit cards are accepted, including online and in most stores.
- Protect your wages. Payroll cards receive the safeguards of Regulation E protection and FDIC insurance to ensure funds are protected if your card is lost, stolen or compromised.
Simply issuing and depositing checks can cost businesses between $26 billion and $54 billion each year. For business owners, payroll cards will help:
- Cut payroll processing costs. Payroll cards save businesses up to 65% in administrative costs by simplifying the payroll process, reducing the time to manage payroll, decreasing paperwork, and more.
- Lessen the likelihood of check fraud. When writing a paper check, there is a chance of falling victim to check fraud. However, depositing funds directly onto an employee’s payroll card account helps to lessen that risk.
Offering the choice to receive wages on payroll cards can save time, money, and resources for both businesses and employees. Whether an employee doesn’t have access to a checking account or is looking for ways to save, payroll cards have benefits for everyone.