A paycard (or payroll card) is an alternative to a traditional bank account or paper check that allows any employee to be paid electronically via direct deposit.
Paycards can be especially useful to non-traditional workers, such as those who work multiple gig jobs, and un- and underbanked employees. 25.2% of the US workforce is un- and underbanked. The FDIC defines an unbanked household as one in which “no one in the household has a checking or savings account,” while an underbanked household is one that may have a bank account, but also uses alternative financial services like money orders, check cashing, payday loans, rent-to-own services, and other subprime products. Use of these services can indicate that, while the household may have a bank account, they are not using it.
By implementing the Fintwist digital payment solution, employers offer these non-traditional employees easier (and cheaper!) access to their hard-earned money. The American Payroll Association states that paycards are “80% less expensive than check cashing services.” With the Fintwist digital payment solution, employees get access to bill pay, online purchases, money management tools, and P2P transfers at no cost to the employer.
How does a paycard work for the employer?
Employers can simplify payday (and say goodbye to the cost of paper checks!) by providing paycards as an option to their non-traditional employees. Fintwist works like any direct deposit – all the employer has to do is distribute the cards and update payroll by entering in each paycard’s routing & account number.
Here’s more info on the ease of paycards. (LINK TO WHY FINTWIST PAGE)
How does a paycard work for the employee?
A paycard works just like any other card! Cardholders can swipe their paycard as either debit or credit anywhere Mastercard is accepted, but we recommended swiping as credit. When swiping as credit, Fintwist cardholders are protected by Mastercard’s Zero Liability Policy and Mastercard Fraud Protection. Though employers implement the Fintwist digital payment solution, the card belongs to the employee (or cardholder) once they activate their card. This means that employees can take their card with them to their second job, or to their next job, regardless of whether they still work for the original employer. Additionally, cardholders can have government benefits or tax refunds deposited onto their paycard by using the routing and account number.
Here’s how to find your Fintwist routing and account number.
Benefits of a paycard for an employee:
· Save money by avoiding check-cashing fees and money orders
· Save time by cutting out standing in line at a check-cashing store and paying bills in person using online bill pay
· Benefit from direct deposit without the risk of overdraft fees or monthly account maintenance fees that non-traditional employees may associate with traditional bank accounts
DID YOU KNOW: Unbanked employees spend $750 per year to access their money 😱
· Access to modern conveniences like Netflix, Lyft, Venmo, online shopping (LINK TO SHOPPING ONLINE BLOG) and bill pay and online travel planning such as renting a car or buying a plane ticket
· Have government benefits, tax refunds, and paychecks from additional jobs direct deposited for quicker access than a paper check
· Use Fintwist money management tools to manage money when it’s convenient – our mobile app, website and 24/7 phone support allow cardholders to manage their finances on their own time!
· Safer and more secure than cash
Benefits of paycards for employers:
· Save money by implementing our free digital payment solution, which allows companies to avoid check printing and shipping costs
DID YOU KNOW: On average, employers pay $3.15 per paper check, per pay period, to issue checks?*
· Spend less time on payroll by eliminating paper checks and other traditional payroll woes like escheatment
DID YOU KNOW: Some states allow employers to authorize full deployment of direct deposit. See what your state’s paycard compliance laws are!
· Protection from check fraud
· Save the planet – we’ll plant a grove of trees in each company’s honor who switches to 100% direct deposit
Looking for more information on paycards? Fill out the form below!
* Figure is taken from NACHA as the aggregate cost of labor, postage, printing, stop-payment, and other fees associated with the payroll departments that print paper checks. Actual savings may vary.