For those of you who do not know anything about payroll cards, here’s a quick introduction. Payroll cards emerged in the late 1990’s as a convenient way for employers to pay their “unbanked” workers. A payroll card (or paycard) is a prepaid card that employers can use to pay employees. Each payday, the payroll card is loaded with the employee’s wages for that pay period. Employees can use the payroll card like a debit card, or they can withdraw wages through an ATM, bank cashier, or purchase where they receive cash back.
Payroll cards have grown in popularity over the years as we’ve moved more and more towards a cashless economy, and a growing number of people are either not able to get a bank account or electing not to have one. It is estimated that by 2019 the number of US employees receiving wages via payroll cards will double to 12 million. Employers have been eagerly pushing payroll cards because they reduce the administrative costs associated with the processing and distribution of paper paychecks.
As in every industry there are the companies that have paved the way and been able to command the largest share of the market. Some of the larger, more recognizable names in the payroll card space include ADP’s Aline Card, First Data’s Money Network Card, Global Cash Card, and NetSpend’s Skylight Card. These programs all provide an adequate service to the employers and the employees who adopt them, but we are in a new period in society with exponential changes happening in the financial technology space being driven by upstarts. Yet, payroll companies, PEOs and employers are still choosing a payroll card based on an existing relationship, a well-recognized brand name, or a difference of a few minor fees. There has been great innovation happening in human workforce management with companies like Workday and Namely emerging to upend the old legacy systems. The same is happening in the payroll card space where technology is again disrupting the traditional way of doing things.
I recently looked at the American Payroll Association’s Payroll Card Buyer’s Guide where they compared roughly 10 different payroll card program across 25 different options they offer. While the buyer’s guide was created with good intentions, the problem with it is that the options used to compare the programs are pretty much standard features on every paycard issued today. You’ve got big problems as an employer if you are offering a debit card to your employees that can’t make debit transactions, or that can’t be used to make an ATM withdrawal.
Companies should be evaluating payroll card programs the same way they evaluate the adoption of any new technology or service they plan to offer. The larger the company, the more relevant the topics I list below are. So, what are the differentiators that a company should be looking for when adopting or considering a switch to a new payroll card program? Here’s a quick list that breaks down the features and services for both the employers and the employees that doesn’t just focus on the obvious, like fees.
- Easy to use administrative portal
- Automated card order tracking
- Automated card inventory tracking
- Easy replacement of lost/stolen cards
- 24/7 support (web, email, and/or live agent)
- Multiple administrative user access with role restrictions
- Instant loading and removal of funds for payroll corrections
- Quality reporting (card order history, funds loaded, registrations, etc.)
- Batch registration of new cardholders
- Fast and easy onboarding process
- Quality customer service (web, email, IVR, live agent)
- User friendly cardholder website and mobile app
- Mobile wallet integration
- Bill pay with check writing capabilities
- Access to a free ATM network
- Bi-lingual support (website, email, IVR, live agent)
- Remote mobile check deposit
- Instant access to earned wages
About the Author:
Eric Dresdale was the founder and CEO of Next Step Network, LLC, a reloadable prepaid card company that was acquired in 2016 by San Francisco-based, True Link Financial. Now in his role as vice president of sales for Cardplatforms, Eric leverages his deep understanding of digital payments and prepaid to craft solutions that deliver significant value to both the enterprise and consumers.