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Paycards Provide Convenient and Cost-Effective Way to Cover Employees’ Wages

  • Electronic payment of wages — including direct deposit and paycards (a.k.a. payroll cards) can help companies pay employees in a timely manner following business disruptions like natural disasters.
  • Paycards benefit both employers and employees.
  • Paycards save employers the costs of printing and check distribution, simplify reconciliation of the payroll bank account, and mitigate concerns about lost or stolen checks.
  • For workers without a traditional bank account, paycards provide the same benefits as direct deposit.

Recent hurricanes illustrate value of paycard option for businesses and workers alike

The back-to-back-to-back calamities caused by Hurricanes Harvey, Irma, and Maria in the United States and its island territories highlight a fundamental problem for affected businesses: How do you pay employees when bank branches are closed, your office is destroyed, or you have workers who are living in evacuation zones?

Electronic payment of wages — including direct deposit and paycards (also known as payroll cards) — may help companies pay employees in a timely manner following business disruptions like natural disasters. During these times, businesses may find themselves without the means to print and distribute paper paychecks. Even if they’re able to produce checks, management may have closed the building in the face of danger, and workers may have evacuated. And a disaster is often when employees most need money to cope.


The paycard, or payroll card, offers an alternative to direct deposit. On paydays, a business deposits workers’ wages for the pay period to their paycard account. Employees can use the paycard as they would a debit card to withdraw cash from an automated teller machine, pay for items at stores and online, or can withdraw up to their full pay at most financial intuitions. Paycards make direct deposit available to everyone in a company, even those without bank accounts.

Paycards benefit both employers and employees

For employers, paycards:

  • Eliminate the need to print and deliver paper checks, saving time and money;
  • Often can be managed via an online portal;
  • Ease reconciliation of the payroll bank account; and
  • End worries about lost or stolen payroll checks.

For employees, paycards:

  • Can be used with no cost to the employee, when many basic checking accounts often come with annual fees;
  • Eliminate the need to turn to expensive check-cashing alternatives; and
  • Provide the same benefits as direct deposit – convenience, no missing checks or consequent stop-payment fees, and less risk of identity theft due to lost or stolen checks.

Paycards help provide wage assurance for businesses and workers

Paycards offer businesses a way to ensure that employees receive their pay, regardless of external circumstances. Paycards provide the same benefits as direct deposit, and can be particularly beneficial for workers without a traditional bank account. A 2015 survey by the Federal Deposit Insurance Corp. (FDIC) found that 7 percent of U.S. households — approximately 9 million — were unbanked, meaning that no one in the household had a checking or savings account.

You cannot mandate that employees receive wages via paycards. Employers must offer a choice between direct deposit to an account of the employee’s choice or a paycard. In fact, several states require businesses to offer their workers the option to receive paper paychecks.

With parts of the United States struggling to recover from Hurricanes Harvey, Irma, and Maria, it’s a good time to consider your payroll options. Business owners should know they can choose among a number of payroll options to best meet employees' needs and increase their satisfaction. Electronic payments are certainly among them.

Laura Cottrell
Laura Cottrell is a compliance analyst at Paychex, She also serves as the chair of the American Payroll Association's (APA) Electronic Payments Committee.
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This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.