Many business owners have switched from traditional checks to direct deposit payments. According to the American Payroll Association, 93% of people in the U.S. get paid by direct deposit.
And that makes sense.
Businesses get to avoid printing and mailing paper checks, and employees get their salaries instantly. It’s a win-win.
But what about employees who don’t have a bank account—or who can’t easily access one? You could go old school and send paper checks. Or you could use a payroll card.
What is a Payroll Card?
A payroll card (or pay card) is a prepaid bank card you provide to your employees to pay their salary. Instead of sending checks or direct deposits each pay period, you simply reload the payroll card with their net wages.
The payroll card works similarly to a debit card for your employees, but it doesn’t require them to have a checking account.

What are the Benefits of a Payroll Card?
After direct deposit and traditional checks, a payroll card is the next most common payment method for paying wages.
And it has certain advantages for you and your unbanked employees.
So what, exactly, are those advantages?
Employer Benefits
There are a number of benefits for employers when they choose pay cards over checks, including:
- Reduced costs: According to Commerce Bank, market researchers estimate it costs $10 to issue payment via check. This estimate includes labor costs, plus printing and mailing. Depending on how many checks you need to send, that can add up quickly!
- Automation: You can get your payroll services provider to set up automatic paydays on a prepaid card, which means you don’t have to manually enter wage data or print and mail checks every period.
- Robust security: With a payroll card, the money goes straight to your employee. Additionally, your employees can freeze a card if they lose it or it gets stolen. This means the money stays safe while your employee waits for a replacement. In contrast, checks can get lost in the mail or damaged before your employee cashes them.
Employee Benefits
A prepaid card backed by a financial institution doesn’t only benefit employers. It can also be a better option for employees.
Some of the benefits for employees include:
- Convenience: Employees can use pay cards just like debit cards. They can make purchases at online and offline stores, withdraw money from ATMs, and cover bill payments. They can also check the balance of pay cards using an online portal, email, text, or mobile app. These multiple access points make payroll cards an accessible option—particularly for employees that don’t have access to a traditional checking account.
- Instant access to wages: Employees need to deposit or cash a traditional check before they can use that money. And unbanked employees? They have to pay a check-cashing fee to access their paychecks. In contrast, a reloadable card gives employees instant access to their wages, which makes it easier to pay bills on time.
- Rewards: Pay cards, like the card offered through Hourly, give your employees benefits and rewards, like cash back at participating grocery and convenience stores.
- Better financial management: Unlike regular debit cards, most pay cards don’t let employees overdraw from their accounts. This helps them prevent paying overdraft fees for spending money they don’t have.
- Earned wage access: Some pay cards offer employees access to a portion of their earned wages before payday. For example, a card provider might let employees withdraw up to 50% of their next paycheck during the middle of a pay period. This can help employees make ends meet in between paydays and build more financial security.
- Savings accounts: Some card issuers enable cardholders to create savings accounts, which can support employees' financial wellness.
What are the Disadvantages of a Payroll Card?
We’ve seen many pros of using a reloadable card to pay employee salaries. But what about the cons?
There are some potential disadvantages to consider before adopting a payroll card program, including:
- Usage fees: While many pay card providers don’t charge employers, on the employee side, there can be costs associated with the use of the card. Specifically, a cardholder may have to pay a fee for ATM withdrawals, online and offline purchases, and even checking their balance. When choosing a payroll provider, consider all the fees involved for you and your employees.
- Usage limitations: Typically, you can use a prepaid card wherever a debit card is accepted. However, your employees may have some expenses (such as rent) that accept cash or checks—but not card payments.
Pay Card Regulations
If you plan to use pay cards, you should be aware of the federal and state regulations that apply.
So what are those regulations? Let’s dive in.
Federal Payroll Card Regulations
Fair Labor Standards Act (FLSA) requires you to pay your employees minimum wage or higher.
But pay card usage fees may lower your employee’s wages below the minimum threshold. So monitor the fees to ensure your employees make more than the minimum wage.
For instance, say you pay your employees the federal minimum wage of $7.25 per hour using a pay card with a monthly account maintenance fee of $5.25 for the card user.
Technically, that will put their total income below minimum wage, so you’ll need to adjust your pay rate so that employees still receive $7.25 per hour after the monthly fee is deducted.
State Payroll Card Regulations
Some states have additional pay card regulations in place.
Examples of such state rules include:
- Requirement of employee’s consent to using a reloadable pay card
- Ability to withdraw the entire wage amount without fees
- No withdrawal fees or a limited number of no-fee withdrawals
- Card usage fees must be disclosed to the employee
- Requirement of one or more alternate forms of payment (most states have this requirement)
That said, the rules vary for each state. You can check out state-specific regulations regarding payroll debit cards to see which regulations, if any, apply to you and your business.
Finding the Best Payment Method for Your Business
Direct deposit is one of the easiest and most commonly used payment methods for employee wages. But if you have team members that don’t have bank accounts, you’ll need an alternative.
Before you start printing paper checks, it’s worthwhile to consider using a reloadable card. Payroll cards can streamline your payroll operations and give employees easier access to their wages.
For more information on a card that works seamlessly with your payroll system, explore Hourly’s FDIC-insured Visa payroll card today.
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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Hello Jane,
My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
Cheers,
John Doe
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Hi Jane,
Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
Cheers,
John Doe
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Hi Jane,
Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
Cheers,
John Doe
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Dear Jane,
Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
Cheers,
John Doe
5. Introducing a New Product
A happy client may want to expand their business with you.
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Hello Jane,
I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
Cheers,
John Doe
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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Hi Jane,
You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
Cheers,
John Doe
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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Hi Jane,
I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!
Cheers,
John Doe