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Paycards vs. Checks: Paycards Gaining Ground

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The massive data breach at Target at the end of 2013 or the more recent one at Home Depot may have companies questioning the value of electronic platforms. Why risk exposing consumers and your employees to hackers and cyber-crooks who are on the lookout for coveted financial information?

At the same time, it’s becoming clear that we’re moving toward an electronic landscape. In 2014, for example, Starbucks Coffee’s mobile app processed more than $1.5 billion in payment volume,1 revealing that mobile apps and electronic applications are a real way to help drive growth, business success and loyalty – both for your consumers and your employees.

Paycards, which are payroll debit cards, are just one example of an electronic application that’s quickly gaining popularity among employees and employers alike. A recent paycard study conducted by Visa* showed that users of paycards and their employers are finding the following benefits:

  • Time and money: Paycards help save time and money because employees don’t have to cash paper checks at the bank. Also, in some states, it’s a requirement for employers to make sure that employees can access their full net pay at least once per pay period without having to pay a fee, which means more money is going back into the employee’s pocket. Employers benefit in this scenario, too, because paycards can help reduce the amount of time employers spend on processing and distributing paper checks.
  • Convenience: Employees can use their paycards for immediate purchases instead of having to withdraw money first. With paycards, employers are helping to make it easier for their employees to get their money anytime they need it.
  • Tracking your spending: By giving employees the option of having a paycard, employers are helping to empower their employees to take charge of their finances and track their spending.

We’ll talk more extensively about some of these benefits in upcoming blog posts, so stay tuned!

 

Learn More About ADP SmartCompliance® Wage Payments
 


*Results based on an online survey by Ipsos, as a commissioned agent of Visa, among active cardholders of four Visa payroll partners; data weighted to each partner’s respective share of over half of Visa’s payroll card POS dollar volume from October 2013 – September 2014.

 

The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice.  The information and services ADP provides should not be deemed a substitute for the advice of any such professional.  Such information is by nature subject to revision and may not be the most current information available.

 

1An Inside Look At The Starbucks App, The Most Successful Mobile Payments System In The US – Business Insider, October 17, 2014



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