Editor’s note: Organizations are increasingly turning to pre-paid payroll cards as a way of compensating employees. These act a lot like a credit or debit card, but with less expense involved. In the third of a series of blog posts, Wendy Humphrey – commercial prepaid team lead at Conduent – answers questions about the security of pre-paid cards.
Third in a series
Q: Are prepaid payroll card programs fraud–proof?
A: No form of payment is fraud-proof. But prepaid payroll cards are recognized as one of the safest and most secure forms of paying wages for companies and employees. It works like this: the payroll department electronically transfers funds to each employee’s prepaid payroll card, which can then be used immediately. Right from the beginning, there’s a reliable audit trail. So if a card goes missing, it can be replaced easily – often at no cost. Compare this to paying employees with checks, which can go missing and are incredibly vulnerable to fraud.
Q: How safe are the cards for employees themselves?
A: Well for a start, wages can never go missing. And prepaid payroll cards are accepted anywhere credit cards are accepted. They’re also safer than carrying cash. And like debit cards, they’re pin protected – this reduces the risk of unauthorized purchases, and lost or stolen cards.
Q: How about for online use?
A: Prepaid payroll cards can be used online, the same way as a debit or credit card. Plus, most prepaid payroll cards are FDIC insured which offers an additional layer of protection – not to mention zero fraud liability.
Q: Can employees keep track of the funds on their cards?
A: Prepaid payroll card providers offer mobile and web options, so cardholders can check their balances and activity. That means no matter when you use your card, you can check your purchases and transactions.
Q: What if someone is targeted by fraud?
A: There’s zero liability for cardholders. As long as the incident’s reported and the card is registered, they won’t be liable for the theft.
Q: What about the safety of the prepaid program itself?
A: It’s essential that payroll departments choose a prepaid payroll provider with a track record for implementing all necessary fraud prevention tools and maintaining a secure and compliant prepaid solution. Conduent is one company that ensures up-to-date compliance for all of its prepaid solutions.
Next: Practical tips for the HR and payroll functions in implementing a pre-paid program.