Payroll professionals are aware of the benefits of deploying an electronic pay program within their organization. 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. It is estimated that companies save up to $3.00 per payment by using direct deposit instead of paper paychecks.Employers over the past 25 years have a 65% direct deposit participation rate nationwide.
The Problem of going to Direct Deposit...
An employer whose workforce contains a high percentage of individuals without bank accounts makes it difficult to achieve the desired level of participation in direct deposit programs.
Employers with higher percentages of employees without bank accounts tend to be tho
se in the agricultural, food processing, hospitality, manufacturing, retail, restaurant, and transportation sectors of our economy.
These workers are frequently called the unbanked by employers and the financial services community and represent about 10 million households in the United States.
The Solution by offering a PayCard to the Program
CareLock™ Debit Card Program are practical methods to paying unbanked workers electronically.
CareLock™ Debit Card Programs form a card platform that allows employee funds to stay safe and secure.
It is a cost effective way for payroll professionals to electronically pay their population of unbanked workers.
Celent Communications, a consulting and research firm that focus on technology in the financial services industry estimated that 10% of unbanked households were using payroll debit cards at the end of 2002.
This figure was almost zero in 1998. Projections are that 25% of unbanked households will be using payroll debit cards by 2009 which represents over 14 million paycards and over 27 billion in spending.
How the Card Works for Direct Deposit...
The CareLock™ Debit Card Program is linked to checkless demand deposit account with a FDIC insured bank.
The employer establishes a banking relationship with one specific financial institution as opposed to the unbanked employees doing so on their own.
Once the employer creates a paycard account for the purpose of paying wages to their unbanked workers, the employer issues paycards to these employees and begins to electronically deposit, or load, wages into the paycard account every pay period.
Workers who participate in their employer's paycard program can then access their wages via an ATM or by using the cash back feature available at many point-of-sale terminals within retail establishments throughout the country.
Additional Advantages of the Paycard...
No more lost work time for employees to cash checks
Employees can keep more of their hard earned money by not paying high check cashing fees
Convenient pay by phone or internet options for utilities, cell phones, etc.
