PayCard and Payroll Best Practices

Transcription

1 PayCard and Payrll Best Practices Presenter: Steve McDnald Directr f Sales PayCard and Payrll Best Practices 1

2 Agenda The Paycard Industry The Cmpass Principles and Guiding Values- CFSI Cmpass Guidelines t Payrll Cards- CFSI NBPCA Letter t the CFPB- Cnsumer Financial Prtectin Bureau Questins and Cmments PayCard and Payrll Best Practices 2

3 What is a Paycard? A payrll card: Reladable prepaid debit card Offered by emplyers Emplyees as a way t receive wages electrnically Direct depsit wages are laded nt the payrll card PayCard and Payrll Best Practices 3

4 What is a Paycard? A payrll card (cnt.): Emplyee use: T make purchases in stres r nline Pay bills Withdraw cash frm ATMs, bank branches, r thrugh cash back at retail lcatins Sme cards have additinal features: Savings accunts Persnal financial management tls PayCard and Payrll Best Practices 4

5 Wh uses Paycards? Emplyees: Thse wh wrk in lw-paying r hurly jbs Imprtant tl fr building lng-term financial health Accrding t the Cnsumer Federatin f America ¼ f the lwest-incme wrkers receive their wages via direct depsit int a bank accunt PayCard and Payrll Best Practices 5

6 Wh uses Paycards? Emplyees (cnt.): Lw-incme emplyees withut a bank accunt Payday arrives: Cash, which can easily be lst r stlen Paper check, which requires a cstly and ften timecnsuming visit t a check casher PayCard and Payrll Best Practices 6

7 PayCard and Payrll Best Practices 7

8 PayCard and Payrll Best Practices 8

9 PayCard and Payrll Best Practices 9

10 Paycards High-quality payrll cards carry few fees Cardhlders can generally perfrm basic transactins fr free: Making a purchase Checking their accunt balance Sme cards als ffer additinal tls: Custmizable alerts Saving accunts PayCard and Payrll Best Practices 10

11 Industry Fact In 2014, emplyers laded $32.6 billin nt mre than 5 millin payrll cards This number is expected t cntinue t grw significantly PayCard and Payrll Best Practices 11

12 Industry Fact (cnt.) Traditinally cnsidered a prduct fr un- r underbanked emplyees Payrll cards are becming increasingly mainstream. Mercatr Advisry Grup: 86% f wrkers wh receive their wages n a payrll card als have a checking r savings accunt at a bank. PayCard and Payrll Best Practices 12

13 Paycard - Addressable Market Trending The paycard market has tremendus pprtunity but is 4-5 years frm maturity. Surce: Aite PayCard and Payrll Best Practices 13

14 Tp US banks are shuttering branches in favr f digital banking channels PayCard and Payrll Best Practices 14

15 Big banks are beginning t scale back their brick-and-mrtar branch netwrks in favr r digital channels. JPMrgan Chase is planning t cut 5%, r 300, bank branches by the end f 2016, the cmpany annunced in an Investr Day 2015 presentatin. Bank f America, a clse cmpetitr with a similarly massive branch netwrk, has cut its branch netwrk by nearly 15% since The number f bank branches has been falling natinwide. Nearly 2,900 branches clsed last year, accrding t an advance cpy f the latest FDIC quarterly reprt prvided by Finextra. Cmpared against the 1,229 penings, this nets t 1,657 bank branches lst in PayCard and Payrll Best Practices 15

16 Details frm Chase's Investr Day presentatin prvide an explanatin f why banks are shuttering branches: Custmers are ging digital: A majrity f cnsumer bank depsits are nw prcessed using ATMs and QuickDepsit, the firm s mbile check depsit service. By cmparisn, 90% f JP Mrgan s cnsumer banking depsits were prcessed thugh a teller in Reduced csts: Digital banking activities are less cstly fr Chase. Fr example, depsiting a check via mbile csts 2,067% less than depsiting a check in-branch with a teller. By reducing branch density, Chase custmers will be further incentivized t use digital channels, which will push activity twards these lw-cst channels. Investment in innvatin: Cst savings frm having a leaner branch netwrk can be invested in technlgy that will be better service digitalsavvy custmers such as enhanced ATMs and better mbile banking prducts. PayCard and Payrll Best Practices 16

17 Net Change In The Number f Bank Branches - US PayCard and Payrll Best Practices 17

18 Industry Overview Payrll cards: Becme mre sphisticated financial tls Emplyees are likely t cntinue t turn t payrll cards t: Access Spend Save Manage their mney PayCard and Payrll Best Practices 18

19 Industry Overview Payrll cards (cnt.): Financial health is achieved when An individual s day-t-day financial system functins well Increases the likelihd f lng-term financial resilience and pprtunity. PayCard and Payrll Best Practices 19

20 Industry Overview Payrll cards (cnt.): Fundatinal elements t financial health: 1. A well functining day-t-day financial life 2. The ability t be resilient in the face f inevitable ups and dwns 3. The ptential t seize pprtunities and achieve financial mbility ver time PayCard and Payrll Best Practices 20

21 Industry Overview Payrll cards (cnt.): Paycard emplyees receiving wages: Safe Efficient Cst-effective Allw hard-wrking Americans t plan and budget. High-quality prducts Design and delivery is nt unifrm PayCard and Payrll Best Practices 21

22 Cmpass Principles and Guiding Values PayCard and Payrll Best Practices 22

23 The Cmpass Principles The Cmpass Principles: Guidelines t assure quality innvatin and executin in the financial services marketplace. Reflect the belief that the U.S. financial services industry can actively cntribute t: Imprving peples lives Delivering sustainable value t cnsumers and prviders alike. PayCard and Payrll Best Practices 23

24 The Cmpass Principles The Cmpass Principles (cnt.): There are 4 Cmpass principles: 1. Embrace Inclusin: Respnsibly expand access 2. Build Trust: Develp Mutually beneficial prducts that deliver clear and cnsistent value. PayCard and Payrll Best Practices 24

25 The Cmpass Principles The Cmpass Principles (cnt.): There are 4 Cmpass principles: 3. Prmte Success: Drive psitive cnsumer behavir thrugh smart design and cmmunicatin 4. Create Opprtunity: Prvide ptins fr upward mbility PayCard and Payrll Best Practices 25

26 The Cmpass Principles The Cmpass Principles values: 1. Prfitability and Scalability 2. Deep Custmer Knwledge 3. Safety 4. Variatin and Chice 5. Relatinships 6. Crss Sectr Participatin PayCard and Payrll Best Practices 26

27 Cmpass Guidelines t Payrll Cards PayCard and Payrll Best Practices 27

28 Structure f the Guide The Cmpass Guide t Payrll Cards utlines guidelines acrss three levels: 1. Cre practices Standards fr a high-quality payrll card. Prgram shuld nt be cnsidered high quality unless it meets these practices. 2. Stretch practices Additinal best practices fr prviders lking t mve beynd the Cre practices. PayCard and Payrll Best Practices 28

29 Structure f the Guide The Cmpass Guide t Payrll Cards utlines guidelines acrss three levels (cnt.): 3. Next Generatin practices Have met the minimum standards fr quality Have challenged themselves t stretch beynd thse standards Are cnsidering the next step in high-quality prduct design PayCard and Payrll Best Practices 29

30 Cre Practices PayCard and Payrll Best Practices 30

31 Cre Practices Chice Safety Affrdability Access Transparency Infrmatin and Supprt Persnalizatin PayCard and Payrll Best Practices 31

32 Cre Practices Chice Emplyees are ffered a chice Hw they wuld like t receive their wages. Emplyees are prvided clear infrmatin that enables them t make an infrmed decisin Hw they wuld like t receive their wages prir t enrllment. PayCard and Payrll Best Practices 32

33 Cre Practices Safety Cardhlders funds are insured FDIC NCUSIF pass-thru Insurance Lst r stlen card r unauthrized charges, errrs, r disputes Cardhlder s liability is limited and cardhlder has effective prcedures t reslve disputes PayCard and Payrll Best Practices 33

34 Cre Practices Affrdability Cardhlders able t access their full wages each pay perid withut cst. Cardhlders can perfrm basic functins withut incurring unreasnable fees. PayCard and Payrll Best Practices 34

35 Cre Practices Access Cardhlders can make purchases frm, and payments t, a variety f merchants and billers Wages that are laded nt the card are available fr immediate use Cardhlders can make withdrawals at lcatins that are accessible and cnvenient PayCard and Payrll Best Practices 35

36 Cre Practices Transparency Befre enrlling in a payrll card prgram Emplyees receive cmmunicatins that allw them t understand the card s fees and accunt terms. Upn enrlling in a payrll card prgram Cardhlders are prvided with a clear and understandable set f Terms and Cnditins. PayCard and Payrll Best Practices 36

37 Cre Practices Infrmatin and Supprt Cardhlders Are presented ways t cnveniently access their accunt balance and transactin histries. Can easily btain custmer service assistance. PayCard and Payrll Best Practices 37

38 Cre Practices Persnalizatin If an emplyer ffers instant issue cards A persnalized permanent card is als available t cardhlders As an ptin, r Issued autmatically PayCard and Payrll Best Practices 38

39 39 PayCard and Payrll Best Practices 39

40 Stretch Practices PayCard and Payrll Best Practices 40

41 Cnvenience Cardhlders: Can send mney t ther cardhlders frm their card. Can register fr secndary cards t prvide t friends r family. Are ffered the ptin t split their wages: Payrll card Anther frm f electrnic disbursement. Sub-accunts allw cardhlders t set aside funds fr budgeting r saving purpses. PayCard and Payrll Best Practices 41

42 Mbile Mbile applicatin r a mbile-enabled website Allws cardhlders t perfrm basic transactins Access imprtant accunt infrmatin n the g. PayCard and Payrll Best Practices 42

43 Educatin Advice is prvided t cardhlders Ensure they derive the mst value frm their cards. PayCard and Payrll Best Practices 43

44 Prtability Cardhlders can chse t receive multiple surces f funds n their cards. PayCard and Payrll Best Practices 44

45 Next Generatin Practices PayCard and Payrll Best Practices 45

46 Budgeting Persnal financial management (PFM) tls enable cardhlders Plan Budget Track their expenses. PayCard and Payrll Best Practices 46

47 Savings Cardhlders have the ptin Stre Accumulate funds PayCard and Payrll Best Practices 47

48 Credit If a credit service is ffered in cnjunctin with a payrll card Prviders exercise cautin Only ffer affrdable and high-quality ptins that cardhlders can repay withut incurring a cycle f debt. PayCard and Payrll Best Practices 48

49 Questins? Thank yu! PayCard and Payrll Best Practices 49

50 PayCard and Payrll Best Practices 50

51 STEVE MCDONALD Directr f Sales, rapid! PayCard smcdnald@rapidpaycard.cm PayCard and Payrll Best Practices 51