Do you want to know What Is a Payroll Card? Then this page is just for you, I have given some reviews about the Payroll Card and if you want about what it really means and some other important details then I advise you to keep on reading this article. For a start and also for a better understanding, I will love to tell you what payroll is.
What Is a Payroll Card?
A payroll card is simply a prepaid card that is been used to pay employee wages or salary. Employers might also then offer workers the option to get paid via a payroll card in place of a direct deposit or receiving a paper check.
Payroll cards can also work similarly to other prepaid cards in that they can be used to pay bills, make purchases, or withdraw cash at an ATM. You might then consider getting paid via a payroll card if you don’t have a bank account—but it simply helps to understand how they work first.
How Payroll Cards Work
Employers can then contract with a payment processor such as Visa or MasterCard to offer payroll cards to employees. They can also offer the cards to employees who can then decide if they want to get paid this way or via another method.
There might then be certain requirements employers have to meet under state labor laws in order to offer payroll cards to employees. For example,
Employees must then have the ability to withdraw all the money on the card on payday.
One-time use of the card on payday must not trigger any fees for the employee.
Under Consumer Financial Protection Bureau (CFPB) rules, your employer is simply required to offer at least one other form of payment. If you then opt for a payroll card, the employer or the card issuer must then provide you with a copy of the card’s terms and conditions. This is also very important for understanding what fees you might then pay to use the card.
Once you get paid, you will then be able to use your card wherever it is accepted. So, again, if you have a Visa-branded payroll card, you could also use it to pay your electric bill, buy groceries at the supermarket, shop online, or simply get cash at a nearby ATM. As you make purchases or withdrawals, funds are then deducted from the balance on the card.
The card essentially functions as a prepaid debit card. Your balance would then rise once more on payday or when you added more funds.
Pros and Cons of Payroll Cards
- Receive payment without a bank account.
- Access wages immediately with no check-cashing fees.
- Built-in features can make it easier to manage finances.
- Fees may apply.
- problems with lost or stolen cards.
- Lack of features
- Receiving payment without a bank account: Payroll cards can simply help people who are underbanked or unbanked manage their money. They can even be very useful for people who may have been denied a bank account in the past.
- Access wages immediately with no check-cashing fees: Check-cashing services can then charge a percentage of the check amount. Payroll cards can also allow employees who don’t have bank accounts to sidestep those fees.
- Built-in features can make it easier to manage finances: Payroll cards can also allow employees to track their purchases, withdrawals, and also bill payments, which can help with managing spending and budgeting.
- Fees may apply: While the payroll cards charge no fees to simply get paid, employees may also pay monthly fees, ATM withdrawal fees, reload fees, or fees to check their card balance.
- Problems with lost or stolen cards: If an employee loses their payroll card or it’s stolen, their employer can simply replace it, but that can delay their paychecks in the meantime.
- Lack of features: bank accounts can even offer features that payroll cards don’t, such as access to savings accounts, rewards for purchases, or interest on balances.
Before opting for a payroll card, you should be able to read the fine print to understand what you might pay in fees, how you can also be able to use the card, and what to do if you later decide you would like to get paid a different way later on.
Can employers offer payroll cards as the only payment method?
Employers cannot require payroll cards to be the only form of payment to employees. By law, they must then offer another payment option, such as a direct deposit through a checking or savings account.
Where Can You Use Payroll Cards?
You can even typically cash out wages from your card at a bank, ATM, or location, such as a grocery store, which can then offer cash back with a purchase. Payroll cards can also be used at any business that accepts debit cards or online payments.
Do Employers Offer Pay Stubs If They Use Payroll Cards?
Employers must then offer pay stubs to the employees, but most payroll card programs then provide electronic pay stubs to be given to employees. Employers then need to check state requirements to see if they need consent from employees to change from paper to electronic stubs.
What Happens If A Payroll Card Is Lost Or Stolen?
If a card is lost or stolen, then a replacement card can be issued. You should also notify your employer, and then the employer should also immediately notify the bank or payment provider. There is usually no penalty for unauthorized use of the card as long as the problem is reported to the issuer.