Page 127 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
charges them a high fee to convert the check into cash. Moreover, the
check-cashing service may have a long approval process. Also worri-
some is that employees will be carrying large amounts of cash just after
using this service, which increases their risk of theft. They also run the

risk of losing their paychecks prior to cashing them. Thus, the lack of
a bank account poses serious problems for a company’s employees.
A good solution to this problem is to set up a Visa debit card, called
the Visa Paycard, for any employees requesting one, and then shift pay-
roll funds directly to the card.This allows employees to take any amount
of cash they need from an ATM, rather than the entire amount at one
time from a check-cashing service. The card can also be used like a

credit card, so that employees have little need to make purchases with
cash. Further, the fee to convert to cash at an ATM is much lower than
the fee charged by a check-cashing service. There is also less risk of
theft through the card, since it is protected by a personal identification
number (PIN). Employees will also receive a monthly statement show-
ing their account activity, which they can use to get a better idea of
their spending habits.
Using this card can, however, be difficult for anyone who speaks
English as a second language or who cannot understand ATM instruc-

tions. To help these users,Visa makes available multilingual customer
service personnel, which reduces the severity of this problem.
The Paycard has only recently been rolled out by Visa, hence is cur-
rently available only through a few banks. Contact the company’s bank
to see if it has this option available; if not, an alternative is to switch the
payroll function to the Paymaxx Internet site (www.paymaxx.com),
which offers the Paycard option.

Cost:

Installation time:

100