U.S. Payroll Card Programs: Paving the Path for New Revenue
Report Summary
U.S. Payroll Card Programs: Paving the Path for New Revenue
Payroll cards reduce costs, increase security, and are expected to reach US$68.9 billion in loads by 2017.
Boston, February 22, 2013 – A new report from Aite Group positions employer payroll card programs as a sales opportunity for bank issuers. Based on Aite Group research and discussions with leading payroll card providers, this report sizes U.S. consumer cardholder potential and identifies target companies that are well suited for payroll card programs. The report also addresses regional compliance concerns; outlines program features, options, and requirements; and provides a program-implementation guide for bank issuers.
Though payroll brings no direct value to a company's bottom line, the function can benefit from cost reduction. Payroll cards, which remove costly paper checks from payroll processes while increasing security and providing easy employee access to payment, are helping U.S. companies do just that. The cards represent an impressive market opportunity for bank issuers and payroll service providers: Aite Group expects active payroll cards to maintain a 19.9% CAGR from 2012 to 2017, growing from US$34.1 billion to US$68.9 billion in card loads along the way.
“The opportunity for payroll cards is far more significant than that for direct deposit as the checking account market declines due to checking account fees and changing consumer demographics,” says Madeline Aufseeser, senior analyst with Aite Group and co-author of this report. "Bank issuers can deepen existing business client relationships and expand revenue streams by adding payroll cards to their sales offerings," adds co-author Nancy Atkinson, senior analyst with Aite Group.
This 28-page Impact Note contains six figures and 11 tables. Clients of Aite Group’s Retail Banking or Wholesale Banking services can download the report.