Let’s face it – paycards have their supporters and their detractors. But while these discussions take place among financial experts and industry observers, there are tens of thousands of people who rely on a paycard every day to support themselves and their families.
These are the unbanked. Their reasons for not wishing to have a checking account may vary, but that decision should not stand in the way of getting paid for the work they do.
These folks have other options, such as getting paid in cash. But that can be dangerous, especially for workers who leave their place of employment late at night, and may have to walk or take a bus home. Street crime is a sad reality in our cities and if someone has their cash stolen there is no way for that loss to be reimbursed.
Those funds are protected when they are added to a paycard. There is a paper trail from the employer and a means to stop payment should the password for a paycard be stolen or hacked.
Checks are also safer than cash, but the unbanked employee still needs a place to cash them. Check-cashing businesses charge a fee for their services – why should these employees be penalized for not having a checking account?
Fortunately, while paycard debates may continue, their popularity continues to increase, and not just among the unbanked. Many millennials prefer the convenience of cards to cash and checks even if they have a bank account. That trend is likely to continue and will have a positive impact on the unbanked as well, as there will be less of a stigma over ‘special treatment’ afforded them when it comes to payday.
One thing is for certain – there will always be a percentage of the population that is looking for other options. Paycards provide a fast and easy way for them to join the workforce and access their funds.