Slowly but surely, digital payment technologies have transformed how businesses are run. The digital economy has brought countless innovative improvements to organizations of all sizes, from devices such as Square that turn your smart device into a card processor and make it easier to sell your products, to cloud-based technologies that render your office space obsolete in favor of distributed teams.
Despite this trend, there are areas where companies still typically opt for the old “business-as-usual” way of doing things. One of these areas is Payroll.
While electronic payments in the form of direct deposits are now the norm, the few business owners out there who have taken the time to consider the alternatives have found a better option. Payroll cards are reloadable prepaid cards onto which an employer loads a worker’s earnings at the end of each pay cycle, which can then be used anywhere credit cards are accepted, including ATMs and cash-back transactions.
Both direct deposits and prepaid cards offer some clear advantages when compared to old fashioned paper checks. They are both faster than checks, providing your employees with instant access to their funds and simplifying the bookkeeping on your end by delivering all your payments at the same time. Electronic payments are also more secure than checks, which can be easily lost of tampered with, which can cost your company in the form of canceled check fees and penalties.
But payroll cards offer some additional advantages over direct deposits which can have significant short and long-term effects on the success of your business.
Advantages of Payroll Cards vs. Direct Deposits
- Lower Cost
The prepaid card industry has come a long way and now payroll cards are the preferred alternative to direct deposits, beating out paper checks in 2015. Before then, prepaid cards were often associated with high fees, but today the costs of prepaid cards have come down dramatically to compete with traditional bank cards. Payroll cards can now save both employers and employees a great deal of cost.
- Higher Morale
Not only do payroll cards have lower usage fees and more transparency than traditional bank cards, but they also offer a great deal of usability, earning an A-rating for core features in the 2017 Payroll Industry Scorecard from CFSI. They have the same functionality as credit cards, but they help employees stay out of debt by being preloaded and lacking an overdraft limit. On top of that, they are often linked to superior online and mobile banking platforms. For all these reasons, payroll can help increase employee satisfaction in a cashless and debt-averse world.
- Larger Potential Workforce
In addition to the advantages payroll cards pose for employees who have a bank account, this form of payment can be a life-changer for the unbanked. Workers without bank accounts are forced to pay fees to get their checks cashed, so offering payroll cards can make you a more attractive employer to a wider segment of the global workforce.
Payroll cards can open the door to hiring remote workers from all around the world. It can be challenging and expensive to navigate direct deposits across national borders and integrate with local banks in multiple countries – payroll cards allow you to skip the hassle and pay anyone, anywhere.
- Less Payroll Workload
Whether or not you’re employing a distributed international workforce, prepaid cards can save your company a great deal of cost and labor in the payroll department. Since you are issuing the cards to your employees and reloading them at the end of each work cycle, payroll cards eliminate the need to collect personal banking information from each employee, the need to keep that information safely stored and updated, and the need to fix potential problems with delivering payments. Instead, you retain control of the entire payroll process in-house and on a single payment system.
You can begin to improve the outlook of your business immediately by using prepaid cards to consolidate payments, whether to employees, contractors or affiliates, locally or abroad. With the power to simplify the workload for your business, improve morale for your employees, and keep costs down for both parties, payroll cards are the superior (and often-overlooked) alternative for modern businesses.
With the Payza Card, our global proprietary prepaid card, you can rest easy knowing you’re in the hands of the most reliable and affordable payout provider you can find. With no monthly fee and pay-as-you-go transaction fees, our prepaid card is an affordable alternative for your employees. A Payza Business account makes it easy to complete your payouts with just one click and keep track of your payments with Payza’s detailed Transaction History. Just upload your payroll spreadsheet and send money instantly to anything from a few people up to a few hundred! For more information about the Payza Card, be sure to subscribe to our blog.