Results of a study by the Federal Deposit Insurance Corporation (FDIC) estimate that approximately 8% of US households are unbanked. With upwards of 9 million homes having no checking or savings deposit accounts, the cost of cashing paper checks can be significant. The fees that banks and check cashing businesses charge to cash those payroll checks could add up to over a $1,000 a year for an employee just getting his or her salary.
In addition to the employee costs associated with paper checks, employers experience an increased cost in producing paper checks as well. According to the Office of the Comptroller of the Currency, the cost of producing a paper check can be anywhere from $2-$4. Replacing lost or stolen checks can cost an employer an additional $8-$10 per check.
One solution may be to pay employees by paperless wage payment. Paying employees with payroll cards can reduce the costs associated with printing, distributing and shipping paper checks, as well as further your companys green initiative. Payroll cards provide employees with immediate access to their wages while reducing the time sorting, distributing and reconciling checks. These cards can be used at ATMs, retail outlets, online merchants, and at banks, giving your employees the benefit of a debit card without the added fees of maintaining an account.