Source: Discover Financial Services
Discover Financial Services, a business unit of Morgan Stanley (NYSE:MS), announced an agreement with First Data (NYSE:FDC), to issue Discover Network payroll cards provided by Money Network Financial, a First Data Company.
Money Network will issue Discover Network branded payroll cards and handle card administration.
The Discover Network payroll card by Money Network program provides a smart alternative to paper paychecks including card applications typically not offered by other prepaid card brands. The payroll cards offer underbanked consumers diverse financial management tools including instant-issue prepaid debit card use, check writing capabilities via Money Network Checks, access to a large network of ATMs, direct deposit and pay-to-the-penny payroll services, and money transfers from the United States to Mexico and Latin America.
With instant-issuing capabilities, employers can issue Discover Network branded cards to employees who may not have traditional banking relationships. This feature also is beneficial when delivering bonuses, commissions and special incentives. Discover Network payroll cards provide a 100 percent authorization requirement, which further reduces fraud risks and costs for issuers. In addition to the convenience of immediate access to funds, Discover Network payroll cardholders can check account balances in the authorization messages on their sales receipts after every signature-based purchase.
"Companies are quickly realizing that payroll card programs are a safe, convenient and cost-effective way for both employers and employees to significantly reduce the costs associated with the payroll process," said Tom Crowder, director of strategic development and general manager of prepaid products for Discover Financial Services. "Through our agreement with Money Network, Discover Network can further extend its reach into the rapidly growing payroll card market. We also are strengthening our relationship with First Data, which already offers Discover Network card acceptance as part of its integrated service to small- and medium-sized merchants."
According to the American Payroll Association, it costs between $1 and $2 to process, print and deliver a single paycheck and about $9 to replace it. Additional expenses often include postage or courier fees to distribute paychecks, as well as the cost of tracking and accounting for paychecks once they're issued.
The Discover Network payroll card program helps significantly reduce these costs by automatically loading funds onto cards issued to each employee which can then be used anywhere Discover Network cards are accepted. Eliminating paper checks minimizes employers' exposure to check fraud and removes bank-processing fees for stop payments on lost or stolen checks.
Employees see significant financial benefits as well. While it can cost anywhere from 2 percent to 10 percent of the check's value for an employee without access to a bank account to cash a payroll check, Discover Network's payroll card only carries a nominal fee. In addition, employees can access funds immediately every payday, track their payroll information and pay bills online via a secure Web site, as well as use their cards to make purchases everywhere Discover Network cards are accepted.
"Administering payroll can be costly for any company," said Money Network President, Mark Herrington. "Our agreement to issue Discover Network payroll cards is just another step we are taking to help reduce the expense burden for companies and their workers by offering a solution that provides a safe, secure, and simple alternative for managing their hard-earned money. The Discover Network payroll card by Money Network program allows us to expand our reach and help meet our employer/employee payroll objectives."