What is a Pay Card: How They Work, Regulations, & Pros & Cons

A pay card (also known as a payroll card) is a prepaid debit card employers use to pay employees who don’t have bank accounts. Although regulated by federal and state law, they’re similar to direct deposits in that money is sent electronically, and setup is sometimes free. Pay cards are available from dedicated providers, banks, or payroll companies.If you’re wondering what a pay card is good for, the answer is that it’s great for providing employees with easy access to earned wages. So, if you’re already utilizing payroll software to run your payroll, it’s a good idea to check whether they offer pay cards. Some providers will offer pay cards free to customers, while others charge fees for setup, ATM withdrawals, and even inactivity.How Pay Cards WorkPayroll cards work similarly to direct deposits, except employee pay is transferred to a prepaid debit card instead of directly to an employee’s bank account. Once the money transfers, funds are available immediately, and the employee can...