Another Type of P-Card: Payroll Cards

Purple FlowersToday, I’d like to talk about another type of P-Card.  But, this time, not a purchase card but a payroll card. Payroll cards are similar to debit cards.  In 2012, $34 billion in gross dollar volume was loaded on 4.6 million active payroll cards, according to Aite Group, a financial services consulting firm. And, it expects gross dollar volume for loads to grow to $68.9 billion and active payroll cards to reach 10.8 million by 2017.

On the face of it, payroll cards sound like a great way to address situations where you have employees without banking accounts or with limited access to financial institutions (as each electronic payroll payment is less expensive to an organization than a paper check payment by $2.75, according to the American Payroll Association). And, you would set up these up in OpenRDA just like a regular direct deposit deduction. So, what’s the problem? Lawsuits continue to be filed because of the fees that can significantly erode employee take-home pay.  Rules vary by state.  And, all payroll cards are not created equally (relative to fees the employee can incur as the payroll card is used). Bottom line, you’ll need to do your homework when deciding whether to implement payroll cards in your organization. The American Payroll Association (APA) offers a free webinar on demand pertaining to payroll cards and payroll best practices that you might be interested in (go to and search for payroll card). A payroll card that offers the lowest (or no) fees and the greatest flexibility to the employee, while also saving the organization money, should be the goal.

Phyllis Flowers

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