Leveraging a pay card for your tipped employees can come with some solid business benefits. Pay cards often allow flexibility in when you can send payments to your staff, ensuring they receive tips and other wages faster than they would with paper checks.

But can traditional pay cards for employees deliver the pay experience your workers deserve—and demand—in today’s labor market? Let’s explore the benefits of pay cards for tipped employees and whether there are pay card alternatives that can go one step further. 

Why Offer Pay Cards for Tipped Employees?

Eliminates the cost, hassle, and fraud potential of paper checks

Beyond the administrative hassle of issuing paper checks, each check you write costs your business between $4 and $20 when you take into account materials and processing. In addition, check fraud amounts to billions of dollars lost each year. Pay cards can eliminate this cost, hassle, and potential fraud.

Reduces the potential for errors or theft

Reconciling cash in the till, having to make constant trips to the bank for change, and dealing with potential theft issues can all be huge headaches for business owners. When you put tips onto a pay card instead of dealing with cash, tips can be sent automatically, reducing the chance of errors or theft.

Makes off-cycle payments easier

There’s often an increased need for off-cycle payments in the hospitality industry. You’re likely managing a talent pool of full-time, part-time, and temporary staff all with different payment schedules. Paper checks are inflexible and issuing paper checks can cause payment delays. With pay cards, you can issue payments directly to someone’s card whenever needed, whether that’s tips, mileage reimbursements, bonus pay, or more.

Where Traditional Pay Cards Fall Flat

While there’s plenty to celebrate about making the switch from paper checks or cash to pay cards, many traditional pay cards have not-so-great fine print that could mean additional hassle for you or your team. When evaluating pay card providers, be sure to note these common pitfalls. 

Excessive fees

Transaction fees, overdraft/late fees, minimum balance requirements, and more can eat away at workers’ hard-earned tips. If your pay card doesn’t come with fee-free options, it might not be worth the trouble. Look for a provider with free in-network ATM withdrawals, fee-free transaction options, and an overall transparency in fee structure.

Not widely accepted

A branded card (Visa, Mastercard, or Discover) offers wider acceptance than an unbranded one. This means you can use your card for online purchases, bill payments, and more, without worrying about compatibility issues

Limited to a physical card

When it comes to spending, most people prefer more than one way to use their money. Limiting people to a physical pay card without a digital wallet and contactless payment options (Apple Pay, Google Pay, and more) might feel incomplete to your employees. Look for a provider with a user-friendly mobile app that provides a digital checking account in addition to their physical card. This comes in handy if workers want to spend without the use of their physical debit card.

Many workers can still be unbanked

Traditional pay cards may leave many of your workers without financial services that could help their day-to-day lives. For example, some of your workers may currently be unbanked and traditional pay cards can’t fill that gap. Finding a debit card for employees instead, that comes with a digital banking experience, allows you to offer a better payments experience for all of your workers. 

Lacks a financial wellness offering

Today’s workers want more from their employers. They want to feel seen and valued for their contributions. And they want financial wellness support. (According to a Transamerica Institute report, even though 77% of workers see financial wellness programs as a crucial benefit offering, only 28% of employers offer them.) 

A debit card for employees like the Branch Card not only comes with a full digital banking experience but financial wellness tools like personalized spending insights, cash back rewards, a savings goal feature and more free tools to help workers get ahead financially. Offering these perks in addition to a digital wallet and debit card solution shows your workforce you care about their financial wellbeing—which may be one of the smartest business moves you make. 

Beyond Pay Cards: Why Branch Cards for Employees Give You A Competitive Edge

Traditional pay cards are often limited in their functionality. They aren’t reloadable, and they don’t come with any extra bells and whistles. On the other hand, what they can come with are some pretty hearty fees and inconveniences. 

With Branch, you get the flexibility of a pay card without the fees or limitations of a traditional pay card program. You can instantly send tips, mileage reimbursements, or any other type of payment as soon as after each shift. Offering more to your workforce may mean the potential to better recruit, retain, and incentivize your tipped workforce—which we know has become more challenging than ever. Plus, our no- cost, easy integrations with payroll systems simplify the entire process.

Branch offers:

• A full digital banking experience with a Mastercard debit card
• No late fees, minimum balance requirements, or credit checks
• Free in-network ATM options
• Mobile app convenience
• Earned wage access functionality, where employees can request an advance of a portion of their earned wages before payday 
• Financial wellness features like personalized spending insights, cashback rewards, a savings goal feature, and more

Learn more about Branch’s debit cards for employees and why offering an upgraded pay card experience—without the cost or fees—can be a win-win for your business. 

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