Recent news articles have warned consumers to be aware of gift cards and reloadable debit cards, citing excessive and/or hidden fees. As employers attempt to implement pay card programs, these warnings cause employee concerns toward what otherwise would be a smooth and successful campaign to move all employees to e-payroll. Much of the misunderstanding is due to the fact that most articles don’t offer much (if any) differentiation between the cards.
There are major advantages to Payroll Debit Cards over Gift and General Purpose Reloadable cards. The most significant protections are from state and federal government laws in place to regulate Payroll cards and protect employees.
Payroll cards are typically:
· Regulation E compliant
· FDIC Insured
· Protected by VISA® zero fraud and liability protection
Regulation E
Regulation E protections provide advantages for payroll debit cards. Only payroll debit cards are subject to Regulation E, which includes many important customer protections.
Such as:
· Fraudulent charge protections
· Dispute-resolution procedures.
· Periodic account statements.
· All terms, conditions, and fees to be clearly disclosed.
FDIC Protection
Payroll pay cards are Federal Deposit Insurance Corporation (FDIC) insured for up to $250,000 per account (employee).
Visa Protection (branded only)
The VISA® Zero Liability policy provides you with protection against fraud. Should someone steal your VISA® card number, you pay nothing for their fraudulent activity. This policy applies to any item purchased with your VISA® card or card number including purchases made through the Internet.
Other Advantages
· Lost or stolen payroll cards can be quickly and easily replaced, without loss of funds.
· There is no need to go to the workplace to receive a paycheck.
Pay cards provide employees many advantages over General Purpose Reloadable Debit cards. They are more secure, less expensive, and easier to use and load. Unbanked and underbanked individuals choose to use General Purpose Reloadable Debit cards to gain some of the advantages of traditional bank accounts, but fear high fees and overdrafts. These cards provide an entryway into traditional banking services but lack FDIC insurance and enhance federal and state protections. These individuals would be better served by opting for a pay card provided by their employer that offers superior value and security, like the rapid! PayCard.
