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The Case for Payroll Debit Cards in 2024

August 27, 2024 Kevin Kenealy On-Demand Pay, On-Demand Payroll Comments Off on The Case for Payroll Debit Cards in 2024 ,
The Case for Payroll Debit Cards in 2024

Payday is the best day of the week for many of us.

But how do you actually get your hands on your hard-earned cash these days? Paper checks are old school. Direct deposit is all the rage.

In fact, a 2019 study by the FDIC on how people manage money found that 7.1 million U.S. households don’t even have a bank account.

Therefore, there’s another option gaining steam – payroll debit cards. These pieces of plastic offer a new way to access your pay.

But are they right for you? Let’s learn the pros, cons, and everything in between about payroll debit cards.

What Are Payroll Debit Cards?

Basically, they work a lot like the debit card already in your wallet. Each pay period, your company loads your earnings onto the card. Then you can use it to get cash, shop online or in stores, and more – just like a bank debit card. These cards give you a way to get your pay without direct deposit or paper checks. Perfect for folks without bank accounts.

How It All Started

Payroll cards first popped up in the 90s but have blown up recently. A 2019 survey found 7.1 million U.S. households don’t have bank accounts. Even people with bank accounts are digging these payroll card things. Use has tripled from 2017 to 2022 as folks realized how handy they can be. Experts predict the growth will keep cruising along over the next few years.

Perks for Employers

Employers are loving payroll cards too. Here’s why:

Ditch Expensive Paper Checks

Even a small stack of checks costs money to print and mail out. Payroll cards let companies slash this expense by going fully digital. Cha-ching!

Simplify Paydays

Trying to wrangle checks, direct deposit, and cash is a big freaking headache. Payroll cards let employers pay every employee the same way – easy peasy!

Enhanced Security

Checks can get lost or swiped pretty easily. Payroll cards keep your hard-earned money secure until you go to spend it. Lose your card? No prob! Your company can quickly cancel it and get you a new one.

Options for Unbanked Staff

For employees without bank accounts for direct deposit, payroll cards give a practical alternative beyond physical checks. Everybody wins!

Perks for Employees

In addition to making your boss happy, payroll cards can also do great things for you:

Faster Cash Access

Money on these cards is available on payday, rather than waiting for checks or direct deposit. Your cash is right at your fingertips!

Total Convenience

Use payroll cards anywhere debit cards are accepted online, in stores, at ATMs – the works! Way better than running to the bank to cash a check.

No Extra Fees

Some prepaid cards nail you with fees when you go to buy stuff. Not payroll cards! Shop away fee-free.

Protection from Fraud

Perks like zero liability fraud coverage come with most payroll cards to keep your money safe. No worries if your card gets lost or stolen!

Potential Pitfalls

Payroll cards aren’t all rainbows and butterflies though. There are a few potential downsides:

Annoying Replacement Process

Dealing with losing a card loaded with your pay could be a hassle, even with fraud protection. Getting a new card rushed to you could be a pain.

Surprise Fees

You might get hit with extra fees for things like out-of-network ATM use and overdraft attempts. Lame! Ask for details.

No Interest Earnings

Unlike money chilling in your savings account, balances on payroll cards don’t earn interest. Bummer!

Regulations Galore

These card programs have a web of legal rules to follow that your employer has to keep up with. No fun.

How Payroll Cards Work

If payroll cards sound decent to you so far, here’s a quick rundown of how they work:

  • You sign up for the card through your employer
  • Company sends your info to the card issuer
  • Card issuer makes the cards (usually Visa/Mastercard)
  • Your pay gets loaded onto the card each payday
  • Activate the card and start spending that cash!
  • Check your balance and statements online or on the card app
  • Card issuer replaces lost or damaged cards ASAP
  • Issuer also handles regulatory stuff, security, support – the works!

Still Have Questions?

If you still have questions about whether payroll cards are the move for you, reach out to the pros at The Payroll Company. They can clue you in on the payroll card services that could fit your needs. Give us a call today and get answers to all your payroll card questions!


Benefits of Payroll Debit Cards for Employees and Employers in 2019 – Part Two

May 17, 2019 Kevin Kenealy payroll debit cards, payroll processing, payroll processing company Comments Off on Benefits of Payroll Debit Cards for Employees and Employers in 2019 – Part Two ,
payroll-debit-card-for-wages-the-payroll-company-albuquerque-nm-505-944-0105

Companies need to check to see if there are extra fees assessed to employees when issuing payroll themselves via debit card and when choosing a payroll processing company offering pay debit card program. Companies need to offer several ways for company employees to receive their pay. A company is not allowed by law to require employees to receive pay solely by payroll debit card. Employees must be provided several options as to how they receive their wages, not just via debit check card. It has been reported over recent years that some employers didn’t do this for their employees, which is against the law. In response the Consumer Financial Protection Bureau issued a bulletin covering legal regulations covering payroll cards. The main points on the bulletin were as follows:

  • Fee Documentation – Documentation must be provided of fees
    charged by the issuing bank to the employee related the EFTs (electronic fund
    transfers) and written explanation about liability limits.
  • Account Records Access – Regular statements must be given to
    card holders by payroll debit card issuers electronically online or telephonically
    providing account transaction history and fees charged.
  • Unauthorized Transfer Liability Limits – Employee’s limit of
    liability for use not granted if reported within a specific written time period.
  • Rights to Resolution for Errors – Payroll debit card financial
    institution mandated response to card holder within 6 months of occurrence of mistake
    or error.

Several different organizations over recent years have provided
statements about the pluses of wages being disbursed to employees via payroll
debit cards and regarding the top ways for employers to make the most of the
program for their employees. The top recommendations included issuing pay without
fees being charged (employer pays the fees) and to provide the wages using the
top credit card brands such as VISA, MASTERCARD and DISCOVER. Employers must also
give complete documentation of fees employees may incur.

Payroll debit cards are a big part of
providing payroll to employees today that do not have a bank account. Operated
correctly, payroll debit cards provide wages at a low cost with speed, easy and
convenience to employees. The program helps both the employer and employee work
together efficiently. Look today with your local payroll company to see if your
company can save money and improve its payroll process each month by starting a
payroll debit card program as part of its payroll disbursement options.


Benefits of Payroll Debit Cards for Employees and Employers in 2019 – Part One

May 17, 2019 Kevin Kenealy payroll debit cards, payroll processing company Comments Off on Benefits of Payroll Debit Cards for Employees and Employers in 2019 – Part One ,
payroll-debit-card-for-wages-the-payroll-company-albuquerque-nm-505-944-0105

Payroll debit cards are written about negatively from time to time in the press, but it doesn’t mean this relatively new device for delivering payroll should be done away with by companies using them issue wages to employees. Virtually every consumer transaction today to make purchases of goods and services can be done with a debit card. Cash still works, but you cannot use it very easily to purchase a plane ticket for example. Payroll debt cards have both pluses and minuses for employees and employers, but they are widely accepted and provide a huge advantage for a lot reasons. Paying wages through payroll debit cards can be issued by employers themselves or through a payroll processing company.

Advocates talk about how payroll debit cards to employers as a method to lower payroll expenses and improve company effectiveness. With delivery of payroll on a payroll debit card on payday each employee receives their pay via direct deposit on the card. This method makes it easy for companies to reconcile their payroll bank account. Getting rid of printing payroll checks and mailing or handing them out generates direct savings for companies with respect to costs, time and elimination of payroll checks never arriving or getting stolen. Payroll debits cards are a game changer for company payroll processing because they level the playing field for all employees when it comes to payday because everyone gets paid the same time with wages available to all immediately without the need accept a paper paycheck and then go to the bank or a check cashing place and cash it. Payroll debit card programs offered by payroll processing companies in some instances do have fees, making it unfair to employees receiving pay on a payroll debit card.

Payroll debit cards are part of the new era of doing everything electronically. When done right, they provide a convenient and a cost-effective way of delivering payroll and one that is mutually beneficial to both employers and their workforce. Investigate how much money your company can potentially save by implementing a payroll card program and learn how it can streamline your payroll processing.


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