For people who are over 18 and have jobs with companies, most of them get paid with a check on their payday. Many companies automatically deposit the employee's money directly into that person's bank account, and the worker gets a receipt or proof of that deposit in an envelope on payday.

     However, there are 12 to 15 million people in the United States who don't have a bank account. How do all those people get their money on payday? In the past, they would receive a check and then go to a "check cashing" store to cash their check. Those stores would keep some of the money as a fee for helping that person. It's very, very expensive to do that.

     In the late 1990s, payroll cards were invented. They are cards that look just like a regular debit or credit card. Employers "load the card" with electronic signals which represent the amount of money the employee is to receive. It becomes a "pre-paid debit card." A manager delivers the card to the employee who must learn the Personal Identification Number or PIN that goes with it so they can use it. Then the employee can use the card in any ATM or buy products at store checkouts, swiping his card like any other debit card.

     Issuing the payroll cards is cheaper for the employer than preparing checks, which costs $1 to $2 each. The cost of preparing the payroll card is about 20 cents each. Not only that, over 4 million payroll checks are lost or stolen each year. Replacing checks costs American companies nearly $48 million each year. Using payroll cards helps companies save the expense of mailing individual checks to their employees.

     For employees who don't have a bank accounts, the payroll card is a real help, for both the employees and the employer.

Did You Know?

With payroll cards, the employee doesn't have to cash a check and carry a lot of cash in his pocket. The cards are safer than cash!