Abstract
Boston, MA -- February 9, 2010 - Payroll cards are one of the fastest
growing prepaid card segments and the products are posed for further growth as
companies attempt to reduce operational expenses by moving from traditional
paper-based payroll systems to electronic distribution methods.
Continuing to gain momentum, with companies like Walmart introducing the cards
to employees, payroll cards do face unique challenges from state and federal
regulators that need reassurance that the products meet encashment and
reporting requirements. Similar to other prepaid products, payroll cards also
face heightened sensibilities around the subject of consumer fees for
financial services.
Mercator's Advisory Group's Payroll Cards 100% Electronic Payments 80% of
the Time Crossing the Market Finish Line report examines the payroll card
market and its promise of 100% electronic payroll - an idea whose time may
actually have come as solution alliances, regulatory amendments, and consumer
readiness may actually be moving the market across the finish line.
“By offering employees the choice between direct deposit into a checking
account or on to a payroll card, and carefully explaining the benefits of
electronic payment, employers can experience high rates of card penetration
(as high as 70% in some cases) or even eliminate paper checks altogether when
program participation is mandated,” Patricia Hewitt, director of
Mercator Advisory Group's Debit service comments. “While most of the
case studies we reviewed were voluntary in their construct, we would
anticipate that this will change as the industry settles into a more
electronic-friendly regulatory environment.”
Highlights of Payroll Cards 100% Electronic Payments 80% of the Time Crossing the Market Finish Line report:
- An appendix identifying the 51 payroll card solution providers currently
operating in the United States.
- Solution providers are rationalizing liability-free programs, which remove
one of the final barriers to implementing nationwide payroll card programs.
- Persistent employee communication on card usage and benefits is one of the
hallmarks of successful payroll card programs.
- Human Resource managers should consider the entire range of uses for
payroll cards and carefully review their employee base when crafting program
features and benefits.
- Technology and regulatory changes have converged to create a highly
favorable market for prepaid payroll cards.
One of 13 exhibits in this report:
This report is 30 pages long and has 13 exhibits.
Companies mentioned in this report include: ADP, First Data, CitiBank,
Equifax, Workforce Solutions, Kelly Services, Home Depot, NurseFinders,
Steinmart, Toyota, JPMorgan Chase, Walmart, Money Network, Prepaid Services, H
& R Block, Intuit, Paylocity, Wells Fargo, Bank of America, MasterCard, Visa,
American Express, Discover.
*This list does not include all 53 prepaid payroll card providers mentioned in the appendix.
