Saturday, March 2, 2013

Payroll Cards Gain with Rising Tide of Unbanked & Underbanked

Payroll cards have been available for decades, but the market is really taking off now, with employers expected to load nearly $69 billion on to the cards in 2017, up from $34.1 billion in 2012, says a new report from Aite Group. That works out to a compounded annual growth rate (CAGR) of 19.9%!

First introduced in the 1980s, payroll cards special purpose re-loadable debit cards used by businesses that want paperless payroll but for various reasons they can't get all employees to sign up for Direct Deposit.

A few years back, retailing giant Walmart made headlines, in fact, when it mandated payroll cards for all employees not being paid by Direct Deposit. Now the prepaid debit card company NetSpend is teaming with CompuPay, a leading provider of integrated payroll services, to support a new payroll card program, Skylight PayOptions, for CompuPay customers.

The Skylight PayOptions program is designed specifically for companies with unbanked and under banked employees, the companies stated. And it conforms with all federal and state regulations that govern prepaid debit card programs, including free access to money via ATMs, branch withdrawals and checks.

"The opportunity for payroll cards is far more significant than that for Direct Deposit," says Madeline Aufseeser, Senior Analyst at Aite.

In 2012 Aite conducted a consumer survey that revealed recently "debanked" Americans consider prepaid cards better and cheaper than checking accounts.

No comments:

Post a Comment