The dollar amount loaded onto payroll cards is expected to grow by 19.9 percent each year into 2016, according to the Aite Group.
Payroll cards, an alternative to traditional paper checks and direct deposit, act as a debit card for employee wages. Especially for workers in low-paying or hourly jobs, payroll cards can be the starting point for building future financial health.
According to the Consumer Federation of America, just one-fourth of the lowest-income workers access wages through direct deposit into a bank account, whereas more than 80 percent of the highest-income workers do so. That means lower-income works rely on cash or paper checks, which creates the hassle of a trip to a check casher.
However, 86 percent of workers who receive wages on a payroll card also have a checking or savings account, according to the Mercator Advisory Group, allowing employees to pursue more sophisticated forms of financial management.
Using payroll cards effectively requires that employers are aware of relevant legislation and standards.
Visa is dedicated to helping its customers find the best way to take advantage of this safe and convenient wage option. With that in mind, we are happy to incorporate suggestions from The Compass Guide to Payroll Cards, released by the Center for Financial Services Innovation and written by leaders within the payroll card industry.
In the guide, you’ll find 24 practices that focus on Convenience, Transparency, Safety, Choice, and Affordability applicable for the various players involved in administering a payroll card for employees.
By following this guide, companies can provide their employees the solutions they need and empower them to strive for long-term financial well being.