A payroll card can be similar to any other debit card.
Payroll cards are financial cards that allow access to wages and other income issued to the holder by an employer. The use of a payroll card service eliminates the need for direct deposits into a checking account, as well as manual deposits into a checking account. With the payroll card, the employee can withdraw cash at any ATM or use the card in the same way as with any debit card.
Payroll cards can be used in the same way as a debit card.
Employees find that the payroll card approach has several advantages. First, most programs make wages and salaries available on the same day the employer issues payments. This means there is no need to wait until the next business day to withdraw funds, as is often the case with a direct deposit into a bank account. This quick access to employer-issued compensation also means employees don’t have to run to the bank to deposit a check before a certain time in the afternoon for funds to be posted to an account the same day.
A payroll card can be used to withdraw cash from an ATM.
Employers can also benefit from using a payroll card service to pay their employees. The process requires no more steps than dealing with a direct deposit and often simplifies the related processes of issuing receipts that detail the payment disbursement for the quoted period. Employees can access the internet to view their balances and also get a detailed report of net salary retention and distribution with ease. This means less paperwork to generate for the employer.
While a payroll card has a number of benefits, it’s important to note that not all payroll programs work the same. There are many different types of fees that may or may not apply depending on the program. For example, your payroll card setup may allow you to deduct a monthly usage fee, a per-transaction fee for any in-store purchases made using the card, ATM withdrawal fees, and card replacement fees. There is also a chance that a top-up fee will be charged each time employer funds are posted to the card. If the payroll card program allows employees to spend more money than is currently in the account, the card provider will charge an overdraft fee, similar to a bank overdraft fee that is incurred when a balance is overdrawn in a checking account.
While a payroll card program provides many of the services and protections associated with a debit card connected to a checking account, the program may charge fees for transactions performed at no charge when using a bank-issued debit card. Depending on the specific payroll card program, the suite of services may not be comparable to using direct deposit into a checking account and accessing funds via a debit card. For this reason, it is important to ask a lot of direct questions before signing up for such a program. Failure to do so could result in a series of unanticipated fees and significantly reduce disposable income.