Guide on payroll debit card for employees

Apr 05, 2024

Employees who have bank accounts and get their salary debited there might not know what is payroll debit cards. Different companies have different accounting and payroll technology.

Prepaid payroll cards are one of them. They are one of the options that companies use to pay their employees. Think of this as a debit card that an employer provides to employees.

Payroll cards for small businesses work great because of their reduced cost.

What is payroll debit card for employees?

Payroll debit cards just work like any other debit card. Employers issue this to their employees and load their monthly wages in this.

Employees can use this card for online transactions, shopping, ATM withdrawals, and other financial needs. Employers can also add other funds and reimbursements into this account. 

Payroll debit cards for employees are very resourceful when they don’t have a bank account but want to use banking functions.

Employers cannot make it mandatory for employees to receive employer payroll debit cards. Instead, they should do a direct deposit or send a paycheck.

Card issuers who help employers to provide payroll debit cards for employees are Visa and Mastercard.

Different types of payroll debit cards for employees?

While the function of payroll cards for employees still remains basic, they can still serve different needs. There are four different payroll debit cards depending on their type and usage.

1. Branded payroll cards

Branded payroll cards are those provided by the known card issuing companies like Visa. They have wider acceptance and accessibility than others.

Employees can use them for in-store purchases, ATMs, bill payments, and wire transfers. Branded payroll cards also work across borders where Visa/Mastercard is accepted.

One can send payments to international accounts at price lower than regular bank transfers. Other than this, branded payroll cards can pay anything from restaurant bills, hotel reservations, ticket booking, and any other payments.

Branded payroll debit cards for employees magnify employee experience and company brand value.

2. Personalized cards

It’s common to notice payroll debit cards with employees' names on them. They can be called personalized cards. But real personalized cards also have one more benefit.

These cards can hide employees' personal and spending information from their employers.

3. Instant issue cards

As the name says, these are cards that one can instantly create without employees' names on them but assign for their use. Let’s say an employee must go on a business trip.

The admin can create a card specifically for this purpose and load it with the needed money. These instant issue cards are the most sought-after product in recent days.

One-time burner cards give more flexibility and less control to employers and convenience to employees.

4. Portable cards

Portable payroll debit cards are cards that are not limited to just one employer. If an employee works for two employers, they can receive payments from both on one card.

Other than the salary, portable cards also let in funds from other sources. In general, a prepaid payroll card ceases to function once the employee is no longer employed.

He/she can use the rest of the money stored, but can’t use the card after the balance touches zero. But portable cards work the opposite way and give maximum flexibility to the user.

How do payroll debit cards work?

An easy and efficient replacement for paper check salary processing is payroll debit cards. They are brought in to digitize the payroll process entirely.

An employer collaborates with a card issuer to provide payroll debit cards for employees. They talk to different vendors, calculate their requirements, and subscribe to the ideal plan.

To transfer the salary to a payroll card, the employer doesn’t need their employees banking details. Whether they pay daily or monthly, they add funds to this card which the employee can access instantly.

The only difference is that a payroll card is not linked to any bank account. There are no monthly fees to use payroll debit cards for small businesses. It’s accepted everywhere as each card comes with a pin, card number, and CVV.

Positive sides of the employer payroll debit cards are

Receive Payments

Not all have bank accounts and not all can get access to banking services. A payroll debit card would be very handy and useful for them. Receiving in cash or paycheck has burdens for employees. 

Talking about employers, printing checks for each employee takes time. Checks are expensive too. Delivering the salary in cash will again lead to manual processing.

Even if they use payroll applications or seek help from third-party payroll managers, it’s again going to cost a bomb. Access to payroll debit cards for small businesses can help their employees receive instant salaries on their payday.

Access to wages

There is a percentage of check cashing fees that banks charge while processing checks. It’s hard to avoid this fee when employees don’t have a bank account. Prepaid payroll cards cut all of that and give access to full wages to employees.

Manage finances

Payroll cards for employers not just save money but give access to track bills, payments, and withdrawals. Even employees can see their expenses through the payroll card and plan their budgets.

Downsides of using payroll cards for small businesses

Fees apply

The businesses may not incur any charges associated with using payroll card services. But the load falls over employees’ shoulders.

They have to pay fees to withdraw money in ATMs, check balances, replace their card, or make international transactions.

Lost and stolen card problems

If an employee loses their card, it’s going to take a while for the employer to arrange a replacement card for them. As they don’t have a bank account and a bank to go to, they can’t access their salary in other ways.

Lack of features

A debit card that comes with a bank account has many innovative features. They can access mobile, online banking, in-person support, credit card, and many more.

But employer payroll debit cards can’t offer anything other than basic transactional services.

Volopay as payroll software for your business

Payroll cards for employers is a decent option to sort payroll expenses. But it won’t be smart if you look at it as a long-term solution.

Payroll cards come with limited features and can actually be expensive when your company has more employees. But paying employees shouldn’t be complicated like this.

Meet Volopay, the organized and automated expense management software. It can streamline your payroll at a cost within your budget.

Our unlimited virtual cards can be assigned to your employees for making recurring salary payments every month. They are also good when it comes to reimbursing employee business expenses.

Both local and international payments are possible at the lowest fx charges. So, paying foreign employees won’t be a challenge. Not just payroll, manage any expenses smartly with Volopay software. 

Suggested reads: Advantages and disadvantages of outsourcing payroll

Process domestic and international transactions swiftly and securely