HR/Finance Leadership Notes

The benefits of getting every employee on an electronic payroll program can be significant — decreased paperwork and expense, reduced chance of lost or stolen funds and happier employees who have faster and easier access to their money.

In the past, with direct deposit alone, few employers could reach this level of efficiency. A common impediment, many found, was employees without bank accounts. Currently, an estimated 13 percent of American households are “unbanked.” (1) However, according to Scott Wisdom, Ceridian product manager, many other factors can also come into play.

“Some long-term employees are unwilling to give up their paper checks and go on direct deposit, even if they have bank accounts,” he explained. “In surveys, we hear many reasons. For example, some want to keep their salary information from other members of their household, and some like the feel of receiving their pay and holding it in their hands. And, no matter what the reasoning, employers are justifiably reluctant to take an aggressive stance and force employees to change.”

A second paperless electronic option

Ceridian offers another alternative that can help employers bring more of their people, banked and unbanked alike, into an electronic payroll solution: Ceridian PayCard.

With Ceridian PayCard, each employee on the program receives a personal, Visa®-branded stored value card that works like a bank debit card. Every pay period, funds are automatically deposited into the paycard account, giving employees instant access to their money. The card is “loaded” by the funds in the account, so, unlike a gift card, it has no value of its own. Users can withdraw cash from any ATM or pay any merchant that accepts Visa debit cards.

“Think of paycards as creating a virtual bank account, one that every employee can have, even if they are not eligible for a traditional bank account,” noted Wisdom. “And, for those who do have bank accounts and are avoiding direct deposit for other reasons, a paycard solution still gives them hands-on personal control of their funds, eliminating some of the reasons for not finally evolving from paper checks.”

The benefits to employees of using paycards are similar to those of using direct deposit: no more waiting in bank lines, no more waiting to receive checks or for them to clear, and less handling of cash. In fact, for employees who don’t have bank accounts and live in an “all cash world,” the benefits of the paycard option can be especially significant