| In some industries, such as retail or hospitality, it is | | | | apply unless the card is being used at an ATM |
| not a safe assumption that a business' employees | | | | that is a member of a network to which the |
| have checking accounts. Very often they do not, | | | | card-issuing company is a member. There can also |
| and paying these workers in the form of a | | | | be any number of other fees associated with |
| traditional paycheck can be burdensome. | | | | using a pay card, such as a loading fee for adding |
| Fortunately, today it is quite easy to set up a | | | | funds. Both the employer and employees should |
| system whereby your employees can be paid | | | | be well-informed of all possible fees for using the |
| even if they do not have checking accounts. | | | | payroll cards. |
| The solution is to use a payroll card (or "pay | | | | Pay cards continue to be a growing trend. |
| card"), which is essentially a debit card that is | | | | Recently, Wal-Mart, the largest private employer |
| loaded with an employee's compensation. In other | | | | in the U.S., announced that it was shifting to a |
| words, rather than receiving a paper check for | | | | paperless payroll system which will involve the use |
| compensation, they will simply have money added | | | | of payroll cards. It is expected that about half of |
| to their cards. Although payroll cards are very | | | | Wal-Mart's employees will continue to use direct |
| similar to bank debit cards, there are a few key | | | | deposit, while the other half will switch to cards. |
| differences. | | | | No more paper payroll checks will be issued. In |
| To begin, there is no individual bank account | | | | addition to lowering the cost of paying its |
| associated with each employee's payroll card. | | | | employees, Wal-Mart expects to save more than |
| Rather, there is one financial account owned by | | | | 250,000 pounds of paper annually. So yes, there |
| the employer, and each employee's card pulls | | | | is even an environmental benefit. |
| funds from that single account. Some cards are | | | | According to analysts at Mercator Advisory |
| issued by banks, but there are other companies | | | | Group, $17.22 billion in payments were made via |
| that issue them that are not technically banks. | | | | payroll cards in 2008, up 26% from the previous |
| Either type is fine, as long as the entity issuing the | | | | year. With that kind of growth, and endorsement |
| payroll cards is financially stable. | | | | from the largest private American employer, it is |
| Like debit cards, these cards can be used to get | | | | clear that payroll cards are the wave of the |
| cash from an ATM. However, bank ATM fees will | | | | future for paying employees. |