Why Your Unbanked Employees Need Paycards

open Posted:   April 25, 2016

WHAT WOULD YOU DO?

If your bank account was frozen tomorrow, what would you do on payday? Can you even begin to imagine how you’d complete all the transactions that make your daily life run smoothly? This situation would be an utter crisis for the average person, but it’s the daily reality of your unbanked employees.

ACCESSING CASH

Some of the things you may need to do to access your money:

  • Pick up your paper paycheck on payday whenever it’s ready – maybe at noon, maybe at 5pm. Worse still, you may have to wait for it in the mail.
  • Find a check-cashing store where you can cash your check and get there before it closes (remember, it’s payday and you’re probably working all day).
  • When you get to the check-cashing store, you’ll have to wait in line and then pay a check-cashing fee to get your cash.

PAYING BILLS

Okay, so you got your paycheck cashed – that’s it, right? Not quite. You still have to pay your bills, remember? Bills that are usually automatically debited from your bank account before they’re due, or that you pay online with your debit card.

  • You can go to 7-11 or a similar convenience store, purchase money orders for each bill you need to pay, and mail each money order to your utility company, cable provider, phone company, etc.
  • A more likely scenario, however, is that your bills are all imminently due, and you don’t have the luxury of waiting for mail to deliver. To ensure your electricity doesn’t get shut off, you spend your day off going from utility company to utility company, paying each bill at the merchant in cash.

Are you exhausted yet? Keep in mind that this is one payday in the life of an unbanked worker. There are other situations an unbanked worker is subject to—from losing their irreplaceable cash to being unable to purchase something that’s only available online—that the average banked person never encounters.

Still can't imagine? Watch this video of banking professionals simulating an unbanked lifestyle:

WHY DON’T THEY GET TRADITIONAL BANK ACCOUNTS?

The solution to all these woes might seem obvious—they should just get traditional bank accounts, right? Unfortunately, it’s not that simple. Some unbanked workers are unable to open bank accounts due to past financial behavior. More common, however, is the fear of overdraft fees or minimum balance requirements. When every penny counts, paying a $36 fee when you’re already broke is not an option.

WHAT CAN YOU DO?

As a payroll professional, you’re in a unique position to offer your unbanked employees an alternative option to both the cash-based lifestyle and to traditional banking. Paycards provide unbanked employees many of the benefits of a checking account, like access to pay on payday via direct deposit, the ability to pay bills online or over the phone, and the security of holding money electronically in an FDIC-insured account, without the possibility of overdraft fees.

HOW IT HELPS YOU

In making life easier for your marginalized employees, you’ll also make life easier for yourself—you won’t have to print paper checks anymore, or scramble when a check goes missing in the mail. You’ll save your company money spent printing paper checks, and ultimately, save yourself time.

Contact a SOLE representative to get started today.

Learn more about the unbanked here.