What Is a Payroll Card?

A payroll card is a type of stored value debit card. Stored value means that money is “stored” on the debit card. In reality, the money is stored at the bank, and is simply accessed via the payroll card. Payroll cards are the fastest growing and most preferred method of receiving payments. Payroll cards are increasing popular for US workers. In addition, international payroll cards are being embraced by workers worldwide.

For years, employers seeking to reduce paper and automate accounting functions have encouraged workers to accept payment via ACH direct deposit. Therefore, most employers are already knowledgeable aboutdirect deposit into employees’ bank accounts. A payroll card works in a similar manner. With a payroll debit card, the ACH direct deposit is placed on the payroll card rather than into a bank account. For employers, the procedure is the same, whether paying workers via direct deposit to a bank account or to a payroll card.

Types of Payments for Payroll Cards

Any type of payment, including, but not limited to, wages, expense reimbursements, commissions, performance incentives, bonuses, and termination pay, can be placed on payroll cards. Cards can be used to receive cash from ATM machines or for purchases at point of sale locations. Many retail locations give the card holder an option of receiving cash back. Therefore, access to funds is very easy.

Payroll cards are bound by the same state rules that govern direct deposit. For example, an employer must receive an authorization from the worker to direct deposit to the card. Typically payroll cards have fees associated for usage. However, many states have statues that demand workers have access to payroll without incurring any fees. Employers offering payroll debit cards need to carefullyconsider the fees associated with the cards.

Fees Associated with Payroll Cards

In general, payroll card holders incur $8-12 a month in fees. Common fees associated with payroll cards usage are monthly fees plus ATM and/or point of sale charges.

Some companies opt to cover all fees associated with the cards. Others will reimburse fees up to a certain amount. Still others will cover the monthly fee if the payroll card holder has access to free ATMs.

Want to learn more? Contact us today to receive more information about how we can help you get started using payroll cards today