What is a Pay Card?

Christine Hudson

A pay card is a payroll debit card that typically looks just like any other credit or debit card. These cards are usually issued by employers looking for a more convenient and cost-effective way to pay their employees. An employee can have one of these cards and can be paid by direct deposit even if he or she does not have a bank account. The debit payroll card is loaded with the employee's paycheck amount and is generally accepted anywhere a debit or credit card is, so the holder may use the money instantly.

A pay card may look just like any other debit card.
A pay card may look just like any other debit card.

Employers are constantly looking for ways to cut costs and run a more financially-fit business. Many times, costs can be cut by changing the way employees are paid, cutting out mailing and supply fees. Going from paying employees through pay checks to paying with a pay card not only cuts down on cost, but on time, as deposits are usually set up to run automatically through payroll software.

Pay cards can be used in the same manner as a debit card.
Pay cards can be used in the same manner as a debit card.

These cards operate much like debit cards in that there are no fees associated with activation, card loading or annual fees. Sometimes, however, there may be costs associated with using certain automated teller machines (ATMs) to withdraw cash with the card. Whenever an employee receives a pay card, he or she should also receive terms and conditions associated with using the card and should read them carefully to discover any possible fees for withdrawing cash.

Some companies even allow their employees to take out small paycheck advances using their pay cards. To do this, the card holder simply needs to request an amount to be loaded onto the card between pay periods. That amount is then deducted from the very next paycheck, sometimes with a small borrowing fee attached. This can help some employees who have financial emergencies between pay dates.

A pay card can offer employees without a bank account a much more cost-effective and safer way to get their paychecks. Those without a checking account will usually have to pay a fee to cash checks or have them loaded onto pre-paid debit cards. If the check is cashed, the employee has the danger of walking around with the whole amount in his or her pocket. With a pay card, many fees are eliminated, and the card can easily be canceled should it be lost or stolen. At the very least, this will ensure that the holder retains a good portion of his or her paycheck rather than losing it all.

Debit payroll cards contain an employees' paycheck amount.
Debit payroll cards contain an employees' paycheck amount.

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Discussion Comments


I think I would prefer having a payroll pay card myself. I do have my payroll checks set for direct deposit into my bank account, but there are times when I'd rather have more immediate access to my money. If my paycheck is deposited to my bank on Friday night, I may not see it in my account until Monday morning. If I had a prepaid card loaded up, I could go straight from work to the grocery store and not have to worry about having enough money in the account.


When I was first hired as a payroll clerk, I was surprised to find out how many employees didn't have bank accounts. We processed payroll checks to everyone, but some of the factory workers would have to go to a local grocery store or bar or check cashing service to convert them to cash. I'm sure those places charges a fee for that service, too.

When the idea of a payroll pay card came up in a meeting, I was all for it. The accounting department would save a lot of money on paper and printing, and two payroll clerks could load those cards in only a few hours. The employees without bank accounts wouldn't have to lose money with alternative cashing sites. I saw it as a win for everyone.

The biggest problem we faced was replacing a lost or stolen pay card. The company that backed the cards required a lot of verification from us before they would issue a replacement card, which understandably caused some aggravation with employees waiting for that replacement card to arrive.

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