Joel Libava
(This is a guest post from Jesse Kanclerz at Paychex.com)
Businesses have more options when it comes to managing payroll. Issuing paychecks can be time-consuming and costly, making payroll cards a cost-effective alternative.
According to a 2009 FDIC study, one-quarter of American households do not have full access to traditional banking services, such as a basic bank account. Much of the underserved population works in hospitality, retail and fast food franchises. Using payroll cards allows an employee with no bank account to easily access his or her funds.
Payroll Card Benefits for Franchise Owners
Paper paychecks can be costly to generate and distribute.
According to estimates from the Electronic Payments Association, when employers switch to electronic payroll, their savings range between $2.87 and $3.25 per payroll payment. By switching to payroll cards, business owners save money on paper and postage. Additionally, when paper checks are lost or stolen, they must be replaced, which is an employer responsibility that is eliminated when using payroll cards.
Electronic issuing of payroll also allows employers to pay workers on time. When unexpected events occur, like severe weather or road blocks preventing employees from getting to work, payroll can proceed on schedule with a payroll card.
What Is a Payroll Card?
A payroll card is a reloadable card issued by a financial institution to a worker on behalf of his or her employer. The Paychex Payroll Card service, for example, requires no credit check or personal bank account. Employees’ payroll funds are deposited into a Chase Pay Card Plus account each pay period. The funds are FDIC-insured, and may be accessed instantly at any time at an ATM.
Benefits for Employees
Employees without bank accounts save money with payroll cards, because they no longer have to use payroll check cashing services. Their funds are immediately available and accessible via an ATM around-the-clock, seven days a week. They can also use payroll cards to make purchases in stores, shop online or pay their bills via phone. Not having to pay bills in person saves time and gas money.
If employees are away on vacation on payday, their funds are easily accessible via the payroll card. Account information can be accessed online. They can get cash back from a merchant without having to pay a fee.
Employee Empowerment Benefits Your Franchise
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The numerous benefits that payroll cards offer employees translate into greater personal empowerment and financial stability. As employees gain instant access to their pay, they are better able to save money and manage their funds. The branded card logo also increases financial status for workers without bank accounts or credit cards, eliminating the need to constantly carry cash.
A financially stable employee suffers from less stress and has more energy to devote to daily work tasks. Not having to rush around to cash checks and pay bills in person also decreases the possibility of being late to work or taking long lunches.
Exploring payroll card providers is highly beneficial for franchise owners. Spending less time on cutting and distributing checks and eliminating postage costs can increase the bottom line. The numerous benefits for employees also make utilizing payroll cards a win-win option.
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