Payroll Deposit Card Advantages 

What Is A Payroll Deposit Card?

A payroll deposit card is a direct deposit ATM card that is issued by employers to employees. The primary purpose of a payroll deposit card is to have an employer direct deposit the pay of an employee into the ATM stored value card instead of issuing a pay check to the employee. Many cards come with a MasterCard or Visa logo that allow employees to use the card to purchase goods and services much like a regular credit or debit card. Most payroll deposit cards have many of the features of an online bank checking account, but without the checkbook. The technology used for a payroll deposit card is similar to a gift card, but the card has the name of a specific employee on the card and only that employee is authorized to use the card. 

Why Do Businesses Need A Payroll Deposit Card Solution?

Most businesses are converting their payroll to direct deposit as an employee perk as well as a way to eliminate the cost of issuing payroll checks. Why do business business need a payroll deposit card solution? The reason is that in some industries such as manufacturing and hospitality many of the employees do not have checking accounts. Unlike checking accounts, a payroll deposit card requires no credit check and it is a great way to offer direct deposit to anyone that does not have a checking account. Additionally, a payroll deposit card can be used as a employee travel or expense card, a payment solution for independent contractors or affiliates, or even for employee rewards and recognition.

Employee Advantages For A Payroll Deposit Card

For employees that do not have a checking account, there are many advantages to having a payroll deposit card. Advantages include:

- eliminate check cashing fees associated with traditional payroll checks

- no need to wait in line to cash your payroll check

- cards safer than carrying cash

- most if not all employee-issued payroll deposit cards offer a certain amount of free ATM withdrawals each month

- 24X7 convenience of ATM withdrawals at millions of ATM worldwide

- convenience of buying goods and services on the internet or in your local store using a Visa or MasterCard payroll card 

- many cards offer free bill paying options

- many card providers offer multiple cards to employees for spouse and love ones

- most cards have fraud protection similar to a Visa or MasterCard debit card

- most cards offer 24X7 live customer service and online web site

- many cards offer English and Spanish customer service

Employer Advantages For A Payroll Deposit Card

For employers who have a large amount of employees with no checking accounts, there are many advantages to having a payroll deposit card program. Advantages include:

- reduce payroll operational costs by up to 70%

- eliminate risks of fraud as well as lost or stolen payroll checks 

- increase employee productivity (no off-site trips to cash checks)

- the cards are reloadable for employee direct deposit (ACH)

- increase employee retention and loyalty by offering perk of direct deposit 

- offer employee the perk of owning a MasterCard or Visa card

- cards normally can be issued to any U.S. resident regardless of credit history

- many card providers offer free marketing programs to show employees the benefits of payroll deposit cards

How To Evaluate A Payroll Deposit Card Provider

There are several reputable payroll deposit card providers catering to large as well as small businesses. Here are some key things to look for in evaluating the best payroll deposit card for your employees and business

- Financial Soundness. Is the payroll card issuer financially sound? All card providers should be backed up by a reputable bank. Additionally, the card issuer should be a reputable business that has payroll experience with businesses like yours.

- "Free and Clear" Compliant. More and more states are updating their regulations in regard to payroll deposit cards. These regulations are to protect employees from fees or surcharges to access their pay. Most card programs stay compliant with these regulations by charging no fees for basic services and allowing a certain amount of free ATM withdrawals each month.

- Visa / MasterCard Versus ATM Card. Unless there is a compelling case for an ATM card program (employees overseas?), go with a Visa /MasterCard program. A Visa / MasterCard payroll deposit card program offers more card holder protection much like a traditional Visa / MasterCard debit card. The quality of card holder protection can vary widely with an ATM card and provides limited benefits to your card holders.

- Compare Multiple Card Programs. Payroll deposit card program costs as well as card features can vary widely between programs. You should expect savings of up to 70% compared to your operating costs for processing checks. Compare multiple card programs for the best features for employees. Card programs continue to improve with such features as bill pay, money transfer services, and online services.

- Custom Marketing Materials. Even if you select a great payroll deposit card for your employees, you will still need to persuade your employees to start using the card. No one likes change. If you are a medium to large employer, you should expect the card provider to provide you custom marketing materials and support to market the payroll card program to your employees.

- Avoid Card Programs That Provide The Employer Incentives At The Expense Of The Employees. Stay away from card programs that have transaction fees for basic services such as Point Of Sale (POS) transactions, programs that do not offer any free ATM withdrawals, programs that use employee information to spam them with unwanted advertisements, and programs that have integrated cash advance (payday loan) features. These type of features may cut costs or even generate revenue for the employer, but in the long-term privacy intrusions and unsavory services will drive employees away. 

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