The latest financial institution to participate in the growing trend of providing payroll card services is Memphis-based Union Planters Bank which recently unveiled its UPPayCard.
Union Planters teamed with Visa to provide the UPPayCard which takes the place of traditional paychecks. Employees of companies that use the UPPayCard own a Visa debit card that is funded with payroll money. The participating company authorizes the transfer of funds to the employee's UPPayCard Visa account and the employee uses the card just like a regular debit card.
Several banks have started offering the service that is seen as a cost-cutting measure by participating companies. Companies no longer have to pay for the printing, handling, and distribution of paper paychecks. Employees receive their payroll transfer automatically without having to be present at a certain time and place to receive a paycheck.
Companies also benefit by not having to incur the expense of issuing replacement checks for lost or stolen paychecks.
Employees who don't have their own bank accounts are particularly good targets for the payroll cards. It is estimated that 13% of the U.S. population falls into this group. These people will save the money associated with check cashing fees by owning the payroll card.
Union Planters Bank's payroll cards can be used at any bank or retail outlet that accepts Visa. Due to the nature of the debit card, cardholders can request cash advances against the card balance at retail locations without having to go to a bank or check cashing company.
Pizza conglomerate Domino's recently switched over to a payroll card system, the ExpressPay Card offered by Comdata. "We're excited to deliver a secure and convenient payroll card for Domino's," said Comdata president, Gary Krow. "It offers a significant reduction in the cost of distributing pay while giving employees new security and convenience."
Sears, Cingular Wireless, and Office Depot are among other companies that have launched payroll debit card systems.