Switch from Paychecks to Paycards

By: Craig Fuller
Date: 5/1/2007

Just a few years ago, paper checks were considered the standard way to pay salaries, commissions, bills, and even for groceries. As we evolve into a paperless society, instantissue debit cards are gaining popularity because of their accessibility and versatility. The ability to issue an instant, debit card account at the time of hire to an un-banked or underserved employee is very powerful.

A debit card can serve as a cost-reduction program for a company because it allows an employer to eliminate checkwriting expenses. Producing a check may be expensive, but the courier cost tends to be even more significant, especially when mailing to multiple site locations. A card solution should not change an employer's existing operation and process, but should increase inefficiencies and eliminate expense immediately.

Although a card program can be beneficial to a company, the employee is the most crucial component of the equation. A program should be selected with the employee in mind and should also serve as an immediate solution to eliminate check cashing expenses. The employee may be paying anywhere from 3% to 5% each pay period to cash their check; this fee is avoidable through using a debit card. There is also added security with a debit card because you eliminate the need to carry large sums of cash. Many debit card programs will offer PIN-secured products which can only be activated by entering a secret code. Other programs offer direct, cardto- card technology which allows balances to be transferred to a secondary card immediately. This option can be powerful for migrant workers as they are spending too much to transfer money internationally through more traditional methods, such as wire transfer. The card-to-card transfer will allow an individual to send money anywhere in the world within a matter of seconds. The recipient will have the ability to access that cash at the current exchange rate for that particular day.

It is evident that the use of debit cards will continue to grow as we move away from paper checks and toward an electronic society, but there is a high demand for a debit card solution today! If your business is still writing checks, there may be companies out there that can assist you in becoming more streamlined and help you to eliminate expenses in your payroll operation.

Craig Fuller is the CEO of Transcard. He can be contacted at 423.553.5227, or by email at cfuller@transcard.com, or visit www.transcard.com.