Have you ever heard of payroll cards?
It’s a new payroll system that employers are using to pay their employees in a way that works for both parties. Payroll cards are essentially prepaid debit cards, which employers load with an employee’s wages in lieu of a check or direct deposit.
An FDIC survey conducted in 2019 found that a little over 5% of US households (about 7.1 million households) were “unbanked,” that is, did not have a bank account. In situations like these, the benefits of payroll cards are enormous for getting wages into the hands of employees.
So, let’s take a look at why payroll debit cards are a good choice for your small business.
- Convenience
One of the great benefits of payroll cards is that employees can use the cards as soon as funds are issued.
Depending on the card issuer, payroll card users can even have access to their funds 48 hours early. You can use these cards, just like any debit or credit card, to make online or in-store purchases. Plus, these ATM-friendly cards can be used to make cash withdrawals.
- Greater Security
Payroll cards feature all the security measures that we’ve come to expect with standard debit or credit cards.
First, there’s the simple matter that a stolen wallet full of cash is a disaster—that cash is gone and there’s no way of getting it back. But theft of a payroll card runs up against numerous security features.
This includes a PIN number, plus, an employee can simply report a stolen payroll card, and the employer can cancel the stolen one and issue a new card with the current loaded balance.
- Save Money
One of the main benefits of payroll cards for businesses is that it saves them money.
By using the payroll card services of a vendor, like www.payactiv.com, businesses can forego the expenses of printing checks. These extra expenses can add up over time, with the accrual of processing and postage fees, so it’s a more efficient and cost-effective way to do business.
- Better Financial Management
For payroll card users, there’s a kind of built-in financial management system.
The reason is that most payroll cards don’t allow overdrafts for purchases or withdrawals that exceed the payroll card’s loaded balance. This is actually a good thing because it prevents the accumulation of debt over time, and allows employees to better manage their expenses.
- Worker Benefits
The truth is, any payouts and benefits to employees can also be managed through payroll cards.
Again, this helps reduce the expenses involved in issuing checks. A business can now simply issue bonus checks, per-diem expense accounts, and other forms of compensation directly through a payroll card.
The Benefits of Payroll Cards
These are five of the top benefits of payroll cards for any small business.
The bottom line is this: payroll debit cards give you tremendous flexibility when it comes to paying your employees. Particularly if you have employees who are among the “unbanked” for whatever reason, you should consider using payroll cards today.
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