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Paycard Overview
Payroll professionals and business owners are aware of the inherent benefits of deploying an electronic pay program within their organization. Upon doing so, employers can save money and resources associated with payroll processing and distribution costs, while employees benefit with the piece of mind of knowing that their wages are accurately and consistently deposited into their personal bank account.
In fact, NACHA–The Electronic Payments Association estimates that companies save up to $0.60 per payment by using direct deposit instead of paper paychecks. This is why employers over the past 25 years have promoted direct deposit to their workforce, achieving a 65% direct deposit participation rate nationwide.
The STORD Paycard Solution
In response to the employer community's desire to find a practical method to pay unbanked workers electronically, MasterCard, Visa, financial institutions, and third-party vendors throughout the country have developed payroll debit card (paycard) products and services as a cost effective way for payroll professionals to electronically pay their workers currently receiving paper checks.
Employer Sets Up Paycard Accounts
Paycards operate in a manner similar to traditional PIN-based debit cards that are linked to a checking account held by individual consumers at any given financial institution. The primary difference between these two types of cards is that an employer establishes a banking relationship with one specific financial institution as opposed to the unbanked employees doing so on their own. Payroll funds are then deposited directly to these accounts in the exact manner that traditional direct deposits are made; no changes to an employer’s existing direct deposit payroll procedures are required.
*Source: American Payroll Association, Payroll Annex, www.payrollannex.org, www.americanpayroll.org
Promoting Paycard Usage
The single biggest determinant of a successful paycard program is the education of the participants. STORD Systems has created a cardholder educational package that aids employers in this important process. These paycard program materials consist of brochures, breakroom posters, and pay stub inserts. At STORD, our goal is to provide each employer with a clear strategy on how they will achieve high levels of participation in their paycard program.
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