Employees have an additional option, in the form of payroll cards, to get their pay safely and electronically. This eliminates the need for employees to cash checks, which may be a headache and expensive. Processing payroll electronically using ACH is more convenient for employees and more cost-effective for firms. Employees who access their salary through check cashing services should avoid direct deposit since it is more suitable for them to utilize check cashing services than maintaining regular bank accounts. A recent survey about how America does its banking conducted by the FDIC found that 7.1 million households in the United States still do not have access to a bank.
Even if it’s just a tiny batch of checks, the expense of printing and mailing paychecks through traditional payroll services may add up to a significant amount for the company. Traditional payroll services include:
- Employers can provide alternate forms of payroll to staff members who do not have access to bank accounts, which are required to establish direct payments.
- Employees are provided with a solution that relieves them of the stress of printing checks while also giving them a handy choice in the form of payroll cards.
The following outlines various advantages and disadvantages associated with payroll cards.
Advantages of Using Payroll Cards
Your payroll system may become more efficient, secure, and convenient for employees by providing them with payroll cards. Think about the advantages that come with having a payroll card for employees:
- Financing in real-time. Your staff members will have immediate access to the monies on payday due to them.
- It is simple to use. You may make purchases with a payroll card everywhere debit cards are accepted. The card allows employees to make electronic bill payments, shop online or in-store, or withdraw cash from ATMs.
- There are no additional charges added to purchases. Employees are not subject to other costs when making transactions using their cards. The creation of convenience checks is one example of an activity that could result in an additional charge.
- Added layers of protection. Payroll cards are a safe and convenient alternative to handing out cash or cheques. Cardholders receive all the benefits of Visa’s zero liability program, including protection against fraud. If a payroll card is misplaced or stolen, the remaining amount on the card can be cancelled, and a replacement card can be produced.
Drawbacks Associated with Payroll Cards
Payroll cards come with a few downsides you and your employees must be aware of before implementing them. When evaluating the various alternatives for payroll services, it is essential to take into consideration the limits of payroll cards:
- Cards that have been lost or stolen. Employees may still be concerned about the ramifications of losing a card loaded with their wages even if there are security precautions in place and there is no accountability for the company. Employees may feel burdened by the processes required to report a lost card, the time needed to obtain a new card, and the possibility of incurring costs for issuing a replacement card.
- There are fees associated with some transactions. Employees may be subject to additional charges for cash withdrawals made from ATMs, convenience checks, and overdrafts, depending on the payroll card programme they use. The disclosure to employees, by the regulations, of any costs associated with payroll card schemes is required.
Answers to Your Payroll Questions for Your Company
When you work with The Payroll Company, you will have complete authority over your payroll card program and access to a devoted support team for advice and assistance with payroll-related matters. Find out more information about the payroll card services available for your employees.