Thousands of employers currently offer Visa payroll cards to employees and for companies looking to go green, streamline payroll operations and lower costs, paycards are only gaining in popularity. The Visa paycard is designed as a financial tool; providing employees a way to participate in their company’s direct deposit program. U.S. employers are realizing significant savings while helping their employees avoid the escalating costs associated with check cashing fees and delays in receiving their checks via mail or pick-up.
The benefits of direct deposit have been well documented for years. Payroll professionals all tend to agree that increasing direct deposit and reducing, or even better, eliminating the antiquated paper check creates a positive impact to employer and employee alike. With paycards, employers now have the ability to enable every employee to participate in their direct deposit system. By using prepaid Visa paycards, all legal U.S. residents with a valid tax ID are eligible. No credit checks are performed. No credit reporting is submitted. A simple enrollment is all that is required.
Paycard service pricing varies by provider but there are many programs that can be implemented for FREE by employers. There are no set up costs, no software to buy or learn, no card cost and no minimum number of employees to enroll. Additional program implementations include mandating direct deposit that meets “pay without discount” regulations and co-branded Visa pay cards. Custom implementations are available to meet individual employer requirements.
Paycards are a tremendous employee benefit and a huge improvement over traditional paper checks. Wages are directly deposited to the employee’s paycard without a trip to pick up a paycheck. With the security and convenience of a Visa debit card, your employees will save time and money. Employees can withdraw cash from any ATM or opt for cash back at millions of merchants worldwide. Employees can make purchases using their Visa card or transfer money instantaneously to another pay card domestically or internationally.
For cardholders, fees can vary. The best programs provide unlimited free usage for Visa purchases and unlimited free PIN based cash back transactions. This is important because statistics show, that on average, employees will use their card as a Visa 27 times during the month. Upfront card fees can be avoided by loading value within 45 days of card issue. Free balance inquiries via a toll free line and free online services including statements, transaction inquiries and customer service and with unlimited free usage and monthly fees as low as $1.95/mo means that unbanked employees who have typically paid expensive check cashing fees can now use a valuable financial tool for less than $24 a year.
By offering your employees more than just a pay check, funding a Visa payroll card provides a financial tool to help them manage their lives. As employees use the convenience of Visa recurring payments to pay their mobile phone, rent, utilities and more, employers benefit with increased employee retention. The safety and security of Visa, coupled with 24x365 cardholder customer service, results in savings for your organization.
Many paycards now come standard with sophisticated web access for online banking, secure funds transfer (card-to-account transfers) or to another pay card (card-to-card transfers). If a card is reported lost or stolen, and a new card is being issued, employees can move funds easily and still have access to their money. Employers should pick a paycard service provider that can manage lost cards so they do not need to change the employees routing or account number, as the closed account is associated with the new card for deposits – further streamlining payroll.
With instant funding options, companies can use prepaid Visa cards to meet a number of remote worker financial needs. Employer and employees both enjoy the security and convenience of Visa—prevents stolen check fraud, the funds are FDIC insured and card fraud protection is provided by Visa. The most common funding method uses existing Direct Deposit (ACH) solutions to fund the card. Employers also enjoy instantly moving funds to cardholders by establishing a funding account. With a funding account, employers can simply upload a payroll file for processing or manage transfers themselves over the secure web site. With Visa ReadyLink, paycard cardholders can easily add funds to their reloadable card at places conveniently close to where they live, work and shop.
Visa paycards can also play an important role in the support your disaster recovery plans. Recent history has brought disaster payroll planning to the forefront for employers nationwide. Hurricane Katrina made pay distribution virtually impossible as mail and overnight delivery services became suspended. Workers were required to flee their homes and employers had a difficult time locating employees to redirect their much-needed paper checks. For the displaced victims that were enrolled in a payroll debit card program, getting paid during this time of crisis was one less thing they had to worry about. They received their pay on payday, regardless of their whereabouts. Amid the aftermath of hurricanes, snow storms, tornadoes, or terrorist attacks, the paycards can help ensure that your people are paid promptly when disaster strikes.
A COMPELLING VALUE PROPOSITION
Visa payroll cards are helping businesses cut administrative costs and virtually eliminate paper check expenses. Few solutions are so easy to implement. Utilizing the same procedures and system infrastructure currently in place, providing a mix of card options including payroll cards and instant issue cards and delivering large scale savings, the old saying “it’s not if, but when” truly fits. With no costs and no minimum number of cards to roll out, and as a completely optional benefit to the employees, it’s easy to execute a small pilot program. For cardholders, lower costs, safety and security coupled with online enrollment and no credit check make getting started with a Visa paycard easy.