US financial institutions adopt Visa payroll card

US financial institutions adopt Visa payroll card

Visa USA has launched a new payroll option that gives companies the ability to use prepaid card technology to replace the costly and often time-consuming paper pay-cheque process.

The first banks to use the facility are Bank of America, Bank One Corporation, First Tennessee National Corporation, FleetBoston Financial and US Bancorp.

The new payroll option allows an employer to deposit an employee's pay directly onto a prepaid Visa card issued in the name of the employee.

Costs associated with producing, handling and distributing pay-cheques, including issuing replacements in cases of loss or theft, are reduced. According to the American Payroll Association, the potential costs savings alone for lost pay-cheque replacement is estimated at $48 million annually.

The new card can be used as a competitive tool to help recruit and retain employees. It is ideal for employees who do not have personal cheque or savings accounts, says Visa.

Visa payroll cardholders can withdraw cash as needed from ATMs and use their card to shop wherever Visa is accepted. The card is also accepted online.

Issuing financial institutions can also add enhancements to the standard features of the card such as a prepaid phone card, telephone and electronic bill payment features.

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