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What is a payroll card?

What kinds of payroll cards are there?

If an employee has a payroll card, does he/she also have a bank account?

Do payroll card accounts offer consumer protections, like deposit insurance?

Can an employee “overdraw” on a payroll card?

Do funds in payroll card accounts earn interest?

Is there a limit to how much can be deposited on a payroll card?

Can an employee have multiple cards? Can an employee’s cards bear different names, e.g, a card for a child in college, or a live-in parent?

Do payroll card holders get monthly statements?

Can an employee get deposits from more than one employer on the same card?

Does my payroll system need to record any special data for payroll cards?


Payroll cards are re-usable debit cards, and they’re a perfect electronic solution for workers without bank accounts. Every payday, the payroll card is automatically “filled up” with a worker’s net pay. From that point on, the employee uses the card just like a debit card or pre-paid gift card. They can shop, withdraw cash, buy groceries, and more, up to the value loaded on the card.

Branded payroll cards feature a logo from a major card processor (like Visa or MasterCard), and they offer much of the same versatility as a debit card. Like a debit card, they can be used at ATMs, as well as any retail location with a PIN-based card reader. Plus, the cardholder can sign for purchases, which is why some providers call them “signature-based” cards.

Unbranded payroll cards (sometimes called “PIN-based” cards) are a bit less versatile. When the cardholder wants to withdraw money or buy goods or services, they can use any ATM or POS terminal that accepts a PIN for verification. These cards aren’t connected to any major card provider, but they are linked to major point-of-sale debit networks like Star, Pulse, NYC, Cirrus and Plus.

When you put money on an employee’s payroll card, the actual funds are held at a bank. The card provider will usually create an account number with the employee’s name on it, but that’s for record-keeping purposes only. Unlike traditional savings or checking accounts, payroll card funds are usually pooled in a single master account held by the card provider. Each payroll account owner has a sub-account within this larger account.

All payroll cards are protected by Regulation E of the Electronic Funds Transfer Act, which caps a cardholder’s liability at $50 if the cardholder reports a lost or stolen card within two business days of realizing the card’s been lost. Regulation E also offers a broad range of other protections, including error resolution procedures and fee disclosures.

Also, all the companies featured in our payroll card marketplace meet FDIC guidelines, and their products offer the full $250,000 FDIC insurance. (Not all companies guarantee this protection, so if you aren’t going with one of our partners, be sure to ask.)

Because payroll cards work like debit cards, withdrawals are fixed at the balance available on the card. Transactions that exceed this will usually be declined. In the extremely rare cases where overdrafts occur, most companies will not charge a fee (overdrawn funds are debited from the next pay deposit).

Some card providers may offer an overdraft “option” for employees. Avoid these companies, or make sure none of your employees can take access the option. Overdraft options can be expensive or even predatory, and may draw employees into a long-term cycle of debt.

No. Accounts holding available payroll card funds aren’t interest-bearing, so there’s no interest to transfer to the employee.

There’s no minimum or maxium. Payroll cards can be funded for any amount.

Many providers offer “companion cards” for family members. Policies vary from provider to provider, and are governed by bank regulations regarding the ID of individual cardholders. Some providers may charge a small fee for issuing these cards.

Yes. By law, each provider has to provide monthly statements to cardholders. Usually, statements are issued online and accessed through the web. Some providers offer free paper statments; others charge a small fee for the service.

Most cards allow it, but restrictions may apply.

No. The system records the same information it would record for direct deposit.