Cutting expenses is something most entrepreneurs strive to do so that they could save most of the profit. This is also one thing they are on the same page as the employees as they would prefer not to lose any percentage of their hard-earned salaries on check-cashing fees.
Luckily, there is a solution from which both the employers and the employees can benefit: employee payroll cards. So, let’s take a look at what they are and what are some of their good and bad sides.
Defining a payroll card
Payroll cards are essentially prepaid cards to which an employer pays the employees’ earnings on a monthly or daily basis, depending on the type of contract. This makes them an alternative option to the traditional paper checks and direct deposit. From the employees’ point of view, they can utilize it just like any other debit card, by using it directly for purchases or by withdrawing money from an ATM.
They are especially convenient for employees who don’t work full-time and those who don’t have bank accounts. Employees are also fond of them because they aren’t forced to open an account in a particular bank while they still enjoy every perk a traditional debit card offers. Also, they are reloadable and if an individual has more than one employer, they can all load the earnings to the same card. Now, let’s move on to the benefits that these cards offer.
Eliminates the need for a bank account
The business world needs all kinds of workers so the next time you wish to take on some extra work but give up because you believe that nobody will need your skills part-time, you better think again. Companies need part-time employees, as well as those they can hire per project, which is especially convenient for students looking to support themselves through college.
They are also often in dire need of remote employees mostly because they wish to spread their talent pool and also save money and space in the office. All these types of employees welcome the use of payroll cards because they can receive their wages without having to open an account in a specific bank, as remote employees often have to. As for the employers, the good thing is that any business can use them, regardless of its size.
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Quick access to money
Cashing checks used to be a nightmare of every employee: waiting in long lines and wasting precious time so that you can finally get your hands on the money that you toiled for during the previous month. Not to mention the check-cashing fees that take a part of your profit which most people think of as unfair, no matter what the amount is.
With the change of the employee structure, you cannot expect remote employees to travel to another city or country to pick up their check, rendering this manner of paying salary useless in case of remote workers. However, a payroll card offers quick access to money for employees because by eliminating intermediaries, it is as good as getting the money directly in cash. Also, they will be able to spend their money as they see fit, without any influence on their credit score.
It is simply convenient
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There are a number of additional reasons employers and employees consider payroll cards convenient. For instance, they can be linked to service accounts such as electricity or gas so that the employees can pay their bills easily. Naturally, they are more secure than cash or checks, considering that you can lose a check while keeping a large amount of cash on you is an invitation for muggers. And if it so happens that the payroll card gets stolen or lost, most companies have fraud protection and will issue the employee a new one.
From the employers’ perspective, the entire payroll process is automated which leaves no room for mistakes and most payroll cards can integrate with any payroll service provider. No paper checks mean no need to waste paper, making their business more environmentally sustainable. In short, the money is sent safe and easy to the satisfaction of both parties.
The drawbacks to any product or service depend on the needs of those who will be using them – a feature that is a perfect fit for one company may be entirely wrong for another. This is quite normal as all companies differ in terms of needs and aims.
There is only one element that could be considered an objective drawback, but only to those who aren’t careful enough and don’t read the small print. Namely, some card providers charge hefty fees for certain activities, such as transferring money to another account or making withdrawals at ATMs and these fees can reduce their income significantly. While it is the employers who usually chooses the card provider, there is no law against employees informing them about the negatives that they discovered.
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Payroll cards are a great tool for providing earnings to the employees and decreasing expenses for the employers. They are quick, efficient, environmentally-friendly, and can be used for direct shopping or to withdraw money from the ATM. All in all, they are a convenient solution for any business’s payroll system.