Pay Cards

There is not a one-size-fits-all payment program appropriate for all organizations.

What happens when an employee needs more options than just direct deposit or a paper check? Enter pay cards. Pay cards function like debit cards and can be securely loaded with an employee’s wages each payday. However, there are pros, cons, fees, and legal obligations to be aware of.

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Service Spotlight – Pay Cards | Abacus Payroll (https://youtu.be/xBUPKhh0vn8?si=tMT2UTOm3vvt4VCa)

Why Pay Cards Are Offered

Almost a quarter of American adults are unbanked or underbanked for one reason or another. That often means they cannot obtain a bank account in order to receive their paychecks via direct deposit. This disproportionately affects some industries more than others, such as agriculture where as many as 75 percent of workers do not speak English and is often a barrier to getting a bank account, or cannabis, where the still- federally-illegal substance poses challenges to traditional banking products for everyone involved. Offering pay cards is a flexible option that can appeal to employees who don’t want the hassle and risk involved with paper checks.

The Pros of Pay Cards

Pay cards are cost-effective to employers as they have minimal administrative burden – once they are issued, they are virtually reloaded each pay day. That’s one less paper check and a cost savings on processing, printing, paper, ink, and postage.

For employees, payroll debit cards offer advantages over paper checks:

Instant access to funds (no waiting for a check to clear)
Lower susceptibility to theft and fraud
Backed by the FDIC
More stringent security measures
No need to visit the bank
No check cashing fees
No need to purchase checks
Ability to shop online and review online statements
Just like direct deposit, digital delivery guarantees timely receipt of payment in event of holidays, a natural disaster, a check getting lost in transit, or if they are remote workers

What to Keep in Mind if Offering Pay Cards

Pay cards cannot be the only option for your employees’ pay method, cannot be offered as a means of continuing employment, and you cannot offer rewards or incentives to encourage pay card adoption. You also want to research your vendor options, as different financial institutions maintain different fee structures, and you don’t want your employees to be stuck with excessive maintenance, withdraw, ATM, or hidden fees and surcharges. Lastly, check with your state legislature as many states have introduced regulations to protect workers’ rights, ensuring that they have “free and clear access” to their hard earned wages.

If you’re ready to implement a pay card option for your staff, Abacus Payroll can walk you through the dos and don’ts and how to effectively communicate the new payment option to your workforce.

Setting you up with pay cards is just one way that Abacus Payroll can customize your payroll & HR services to your exact business needs.

If offering pay cards to your employees is of interest to you, request a quote or speak with your Abacus Payroll specialist.