Paycards are usually a great way for employers to pay their employees. They’re fast and easy for employers, and employees can spend their money immediately, whether online or locally. But what are some of the hidden pitfalls to look out for when paying staffing employees with paycards?
One immediate consideration that comes to mind is what if employees need actual cash? What would the fees be and how accessible would it be? Or what if the worker needs to write a check for their mortgage payment? What is the process like for getting a payment to a mortgage company that has likely only ever accepted checks or electronic transfers traditionally. I don’t know of many mortgage companies that take credit cards (or paycards) as payment so it could prove difficult in certain situations.
Looking at the positives of paycards, there are many. First of all, the economics almost always make sense. The savings of issuing a one-time card and refilling that card electronically versus having to mail out individual paychecks should be consider a near ‘no-brainer’ advantage. The costs saved in postage alone, nevermind the cost of physically stuffing the envelopes, printing the checks, etc etc, are enough to make it worth it for most places. Even better if your employees’ pay information can feed directly from your staffing software saving you and your staff from doing nearly any work whatsoever with payroll. Welcome to autopilot! You can fire your payroll company now too because government compliance is also easily achieved with automated paycard data updates.
In conclusion, I think that paycards are a great value for staffing agencies and their contingent staff workers alike. My concern is for those employees with actual cash needs as well as check-writing needs but barring those issues, nearly all employers should use paycards because they save money and are highly convenient.
If you would like further information about how your staffing business can issue electronically-refillable paycards instead of mailing paychecks, please send an email to email@example.com.