Costa Mesa, CA, April 10, 2013 --(PR.com
)-- CardFlex (www.cardflexnow.com), a leading provider of prepaid payroll cards, knows that it is becoming increasingly common for businesses to have employees who do not have a checking account. In fact, it has been estimated that one-third of the U.S. population doesn’t use traditional financial services such as checking accounts—also referred to as being underbanked. While this statistic is largely attributed to low-income households, factors such as the current economic climate and the rising costs of banking continue to impact a growing portion of the workforce. Fortunately, there is a highly effective alternate solution for paying underbanked employees: Prepaid payroll cards.
The Cost of Being Underbanked
The cost of not using mainstream financial services such as checking accounts can actually be more costly in the long-run. Check cashing businesses, for example, charge excessive fees that seem small on a per-transaction basis, but these fees add up over the course of a year. In fact, it is estimated that people who use check cashing services spend about $286 per year on fees—costs that can be eliminated when businesses pay employees with prepaid payroll cards.
Why Are People Underbanked?
There are obviously many answers to this question, but a few of the reasons people are underbanked include:
· Banks often do not offer the same services to people with lower incomes. In some cases they don’t even open branches in less affluent areas so that they can avoid low-income customers altogether.
· Many individuals work long or odd hours that don’t fall into the typical nine-to-five banking hours. They can’t afford to hold on to their paycheck until they have a day off, and sometimes their day off is the day the bank is closed. Check cashing services appear to be the only option when they don’t have the choice of using prepaid payroll cards provided by their employer.
· Some people, especially those from other countries, may not trust banks to hold their money. They instead prefer to have their money on-hand where they can control it.
Regardless of the reason, most underbanked workers don’t realize how much money they’re losing each month when they use alternative banking methods. Since it’s such a small amount each time time (typically just a few dollars), they don’t think twice. But if they were to add-up those fees over the course of a month or a year, they would certainly prefer a different system. However, when they don’t have an employer-issued prepaid payroll card, their options become very limited.
How Employers Can Help
Employers can help their hard-working underbanked employees by offering an automated, easy-to-use payroll alternative to paper paychecks. Prepaid payroll cards give underbanked employees the freedom to access their wages instantly and without wasting the time and money it takes to use a check cashing service. In addition to benefiting underbanked employees, prepaid payroll cards provided by CardFlex offer numerous advantages to employers as well:
· Automating the entire payroll process reduces the hassles of issuing paper paychecks, and lowers the amount of in-house staff needed to handle payroll
· Prepaid payroll cards are in compliance with Regulation E for all secure electronic funds transfers
· Reducing the costs associated with paper paychecks, including printing, supplies, and other resources
· Improving reconciliation so an employer’s bank account is up-to-date and reflects the current funds for the company
· Increasing employee satisfaction – happier employees are more productive and perform at a higher level
Paper check alternatives such as prepaid payroll cards provided by CardFlex simply make more sense for both employers and their underbanked employees. The time and cost savings alone make them the best way to pay and get paid. Learn more about prepaid payroll cards by visiting www.CardFlexNow.com or by calling 866.634.3044.