Paycards: Responding to Demands for Contactless Payments and Electronic Money Management — While Increasing Employee Engagement

Employee financial health has always been essential to workforce stability. But because of the COVID-19 pandemic, employers need a renewed focus to support their employees’ engagement and performance required to maintain business operations. Even before the pandemic, more than a quarter of the workforce (28%) suffered from feelings of financial insecurity1, according to a Netspend research study earlier this year.

At the same time, as a result of the COVID-19 pandemic, consumers are increasingly turning to online shopping for groceries, household goods and takeout or delivery. Research on consumer spending during the pandemic showed online spending increased by as much as 30%.3 In fact, Netspend cardholder data confirmed the following:

  • Not only are consumers shopping online more, they’re purchasing more with each transaction. Consider this: Spending on digital purchases by Netspend cardholders increased by 90%. At the same time, there was also a 63% increase in the volume of digital goods purchased.
  • Consumers are going digital to fulfill their banking needs, too. Among Netspend cardholders, there was a significant increase in the use of digital and mobile banking tools. Not only was there a 20% increase in online account users, but there was a 73% increase in new user mobile app installs. Further, the percentage of cardholders using Netspend’s mobile check load feature increased by about 22% since the same time period last year.

These changes in consumer behavior can likely be attributed to widespread stay at home and social distancing orders. However, this data helps to underscore the importance of digital and online shopping during the pandemic and in the long term. But this is not an option for the 8.4 million unbanked and underbanked Americans.4 This means that cashless retailers — online and brick-and-mortar alike — may not be able to sell to the underbanked. They may lack plastic, but they don't lack purchasing power.

Employers have a huge opportunity to make changes that help to increase employee engagement, and paycards can help, with a number of optional features, including:

  • Direct Deposit. Via direct deposit, paycards can provide 100% access to wages while enabling payroll managers to complete payroll remotely, reducing the need for employees to wait in line to access their paychecks.
  • Mobile Check Load.5 Cardholders can load checks onto their paycards via phone using the Mobile App6, to access their funds.
  • Online Payments. Since the paycard can be used anywhere Visa® debit or Debit Mastercard® is accepted, employees with a prepaid payroll card can shop online for groceries, household goods and takeout or delivery.
  • Digital Wallet. Help employees to go digital (and contactless) when making payments in-person with digital wallet access.
  • Tip disbursement. Tipped workers can receive tips and reimbursements digitally to their enrolled paycards. This helps reduce the hassle of picking up cash or checks.

 

1 Compiled from Netspend internal data, April 2020 https://www2.e4.netspend.com/Employee-Financial-Health-Whitepaper

2 The Financial Brand, “A Closer Look at How COVID-19 Is Smashing Americans Finances”

https://thefinancialbrand.com/94831/coronavirus-covid-19-loan-credit-layoff-furlough-relief/?edigest

3 BigCommerce, “Understanding the COVID-19 Effect on Online Shopping Behavior”

https://www.bigcommerce.com/blog/covid-19-ecommerce/#changes-in-revenue-across-ecommerce

4 EconomicInclusion.gov, “2017 Household Survey Results”

https://www.economicinclusion.gov/surveys/2017household/

5 Mobile Check Load is a service provided by First Century Bank, N.A. and Ingo Money, Inc., subject to the First Century Bank and Ingo Money Terms and Conditions, and Privacy Policy. Approval review usually takes 3 to 5 minutes but can take up to one hour. All checks are subject to approval for funding in Ingo Money’s sole discretion. Fees apply for approved Money in Minutes transactions funded to your card. Unapproved checks will not be funded to your card. Ingo Money reserves the right to recover losses resulting from illegal or fraudulent use of the Ingo Money Service. Your wireless carrier may charge a fee for message and data usage. Additional transaction fees, costs, terms and conditions may be associated with the funding and use of your card. See your Cardholder Agreement for details.

6 Netspend does not charge for this service, but your wireless carrier may charge for messages or data.

The Skylight ONE® Visa Prepaid Card is issued by Regions Bank® or Republic Bank & Trust Company pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Skylight ONE® Prepaid Mastercard is issued by Republic Bank & Trust Company pursuant to a license by Mastercard International Incorporated. Please see back of card for Issuing Bank. Regions Bank and Republic Bank & Trust Company; Members FDIC. Netspend, a Global Payments Company, is a registered agent of Republic Bank & Trust Company. Netspend, a Global Payments Company, is a registered limited agent of Regions Bank. Certain products and services may be licensed under U.S. Patent Nos. 6,000,608 and 6,189,787. Use of the Card Account is subject to activation, ID verification and funds availability. Transaction fees, terms, and conditions apply to the use and reloading of the Card Account. See the Cardholder Agreement for details.