| Traditionally, a payroll covers functions of dispensing | | | | The payroll card can also be used to directly |
| monetary benefits through wages, tax withholdings, | | | | withdraw cash from automated teller machines |
| deductions and rewards. It is a vital financial record for | | | | (ATMs), thus eliminating the inconvenience of a check |
| any company's accounts and is subject to the national | | | | casher. |
| and state laws. It is also vital to good employee | | | | The payroll card if debited to an individually owned |
| relations, since the timely and accurate remission of | | | | demand deposit accounts, is highly flexible and can be |
| their livelihood is naturally dear to employees. Once | | | | used directly to pay bills. |
| again, traditionally, these financial transactions are | | | | Some payroll cards, actually a majority of them, |
| remitted to the employee via paycheck or a pay slip. | | | | are FDIC insured. |
| No longer, though. More and more companies are | | | | These cards are on the 'open loop' system and |
| turning to a more efficient and cost effective solution | | | | offer a high degree of flexibility as to its usability. This is |
| for both company and employee. Payroll cards are | | | | because they are used on a more universal PIN based |
| handy little plastic cards similar in nature and manner to | | | | network and therefore are accepted and used |
| be used to a credit or debit card. | | | | beyond the user's registered location and its immediate |
| For companies, using this system is convenient and | | | | nearabouts. |
| beneficial for the following reasons: | | | | And lastly, we cover why the banks have offered |
| The company saves money printing and issuing | | | | Payroll Card services at all. Banks do not directly offer |
| checks | | | | or market this service to customers at all. Instead they |
| The company no longer has to buy expensive | | | | approach employers to integrate the service into their |
| check stock | | | | internal wage dispensing processes, and then offer it |
| The company lowers internal costs as result of | | | | to their employees who do not have a direct deposit |
| the above mentioned points | | | | account. The four main aims of a bank in offering this |
| The company no longer has to worry about any | | | | financial service product to consumers are: |
| sort of check fraud, by default - there are no checks | | | | By reducing payroll processing costs and |
| issued that could possibly end up lost or stolen. | | | | increasing the direct deposition adoption rate, it serves |
| Using the payroll card system ensures a smooth | | | | as a cash management service to commercial |
| handling of dispensing of the function of the payroll to | | | | customers. |
| employees who do not have regular access to a | | | | It provides a product to employees who want or |
| bank, or do not have a bank account for whatever | | | | require the functionality and the advantages of using a |
| personal or financial reason. | | | | debit card but do not or cannot manage a checking |
| For employees, using this system is convenient and | | | | account. |
| beneficial for the following reasons: | | | | This obviously plays a role in benefiting the bank. |
| The employee no longer has to pay interest to | | | | How? Since it draws customers into using and |
| cash checks | | | | maintaining their payroll card, a transition into more |
| Since the monetary amount due to them is directly | | | | traditional bank account holders becomes more |
| loaded or deposited onto a debit card, the employee | | | | possible and this also encourages them to use other |
| can directly access their pay on it. | | | | and more of bank products. |
| The payroll card can be used directly to make | | | | Achieving all of the above profitably is the main |
| purchases at retail stores. | | | | aim of the bank. |