An employer generally deals with a payroll processing company or bank to electronically pay its employees using a payroll card. The payroll card is loaded directly into the payroll card instead of paid by paper check or directly deposited into an employee's bank account. The payroll card contains all the information regarding the employee's hours of work, the amount of each paycheck and the deductions and credits listed there. A payroll card does not need a signup fee or any fee for a balance inquiry.
It can be withdrawn from an ATM or a credit or debit card with a nominal fee. It can be kept by the employer as an easy replacement for paper checks. It is a virtual online account that can be accessed from anywhere. An employee can easily login to the account from anywhere and make a change in his/her payroll card balance anytime. A payroll debit card can be held on an individual's behalf by the employer for a specified period and withdrawn when the period is over.
Withdrawal of money without any fee is done whenever an employee requests it. Also, any withdrawal that is made before the due date will incur no fee. There are no penalties involved for making changes in an existing payroll card balance. Unlike a regular checking account that requires regular deposits, an EIN reduces the paper and administrative costs associated with the payroll card account.
Electronic funds processing helps reduce fraud and embezzlement in the workplace. An EIN is attached to the Social Security number of an individual. Thus, the misuse of such numbers is avoided. Since the entire transaction is conducted online, there is no need for ID, password or additional security codes. All transactions are fully traceable.
Many employers make use of an EIN as their direct deposit facility. Direct deposit allows an employer to deposit money directly into the employee's bank account without them having to wait for a check to clear. This eliminates the need for an employee to cash out their check at the end of the pay period. This also saves the employer of the need to provide a banking statement to the payroll card holder. Since an EIN cannot be used for payroll card purchases, it is not considered as least one alternative. Ypu can get more details about the benefits of prepaid debit card on this page now.
Employers can also take advantage of the option of receiving a prepaid debit card from their financial institution. A prepaid debit card is just like an EIN, except it does not have an endorsement by the bank. It has been specifically designed for expenses such as payroll card deposits. The only difference between a payroll card and an EIN is that an EIN requires an application while a payroll card only requires a signature. When the employer uses a prepaid debit card, the bank does not make a deposit in the individual's bank account. The individual can simply withdraw money from their account anytime. Check out this post for more details related to this article: https://en.wikipedia.org/wiki/Payment_card.