According to information from the FDIC, 7.1 million U.S. households are unbanked.
That means they don’t have access to a bank account or many of the other financial services—think credit cards and bank loans—that some of us take for granted.
And because they don’t have this access, there’s a good chance these households are relying on at least one paper paycheck for their income.
In fact, as many as half of all companies are still paying a percentage of their employees with paper checks—something which might be surprising for those of us accustomed to direct deposit.
But here’s the thing about paper checks: They aren’t just inconvenient for both businesses and employees. They come with real risks.
For example, paper checks contain sensitive information and can be lost, stolen, or simply not delivered on time.
If the first two happen, businesses must issue a stop payment and cut a new check for the affected employee—which can take time. Perhaps as long as two weeks.
If the third one happens, the business may not be impacted, but the employee still is. And with 63% of Americans living paycheck to paycheck since the start of COVID-19, any delay can be disastrous.
And the list can go on and on.
Thankfully, companies that want a better solution have two ways of making payroll more doable for their employees—including their unbanked employees.
The first solution is to move from paper checks to a payroll card, which can be game-changing for both your business and your employees.
On the business’ side, payroll cards can streamline your processes and enable you to offer 100% electronic pay.
On the employee side, payroll cards provide workers with access to a debit card, along with many of the other advantages that come with having a bank account. This is great news for the 49% of unbanked households that have trouble meeting the minimum balance requirements for a bank account.
And when combined with the second solution—earned wage access—employees have even more control over their wages.
Earned wage access lets employees access a portion of their earned wages without disrupting existing processes. As a result, employees may be able to reduce their reliance on credit cards, payday loans, and other so-called solutions that can be detrimental, improving their financial stability, as well as their productivity and engagement at work.
To learn more about how payroll cards and earned wage access can make payroll more doable for unbanked employees, download our white paper.