Business Payments Blog

Digital and contactless payment methods have risen in popularity and use, yet many workers still receive at least a portion of their income via cash or paper check. This gap places a burden on segments of the workforce that must “digitize” their checks or cash to transact in an increasingly digital world.

Saving money has been top of mind with most Americans since the pandemic brought unprecedented and unwelcome levels of uncertainty to everyday activities. People are putting these thoughts into action, saving at higher rates than any time in recent memory. In fact, CNN reported1 the domestic savings rate rose more than 5% from February to March of this year, to 13.1% — the highest savings rate in nearly four decades.

We surveyed thousands of employers and employees to better understand the impacts these feelings have on the workforce, which are even more pronounced today. One thing is clear: employers who can help employees feel more financially secure see better retention and performance.

For more than 20 years, Netspend has been providing payment solutions for U.S. consumers and enabling access to tax refunds, Social Security income payments and other government benefits as quickly, easily and securely as possible. Since Friday, April 10th, Netspend has processed hundreds of thousands of deposits for its customers, accounting for nearly $1 billion in stimulus payments, averaging between $1,200 to $2,700 per deposit.

More than eight million households across the U.S. are unbanked1, many of whom operate in a cash-only financial system. This unbanked population carries the burden of navigating alternative financial solutions to pay bills, make purchases, budget and save money. Being unbanked or financially underserved comes at a price for the more than three-quarters of workers living paycheck to paycheck who often bear the cost of hefty fees to access and manage their money.2 When it comes to payday, many U.S. workers would benefit from quicker access to their money and being able to potentially avoid the extra step—and extra fees—in cashing a paper check.

Three in five employers struggle to fill job vacancies within three months1, and research shows these challenges will only grow: per some forecasts, the global talent shortage could reach 85.2 million people by 2030.2 This all adds up to a talent crunch3 — and unprecedented shortages of top-tier talent. It also poses many challenges for companies seeking to fill open slots or grow their teams. How do you attract and retain top talent in a cost-effective way? How do you keep your competitive edge when jobseekers have so many options?

Only 27% of businesses believe they are prepared to ensure business continuity after a natural disaster.1 According to the Federal Emergency Management Agency (FEMA), 40 to 60% of small businesses never reopen following a disaster, and 90% of smaller companies fail within a year if they are unable to resume operations within five days.2 You may already have plans in place for safety and security, but these statistics underscore that business continuity and workforce planning are critically important, too.

Every day, technology companies are producing new mobile apps and software solutions to solve every problem under the sun – including some we didn’t even know we had. But for many in the payroll industry, the old saying may still feel true – the more things change, the more they stay the same. While the enterprise application market is expected to garner $213.43 billion by 20201, why are some payroll specialists living with manual payroll payments and processes?

The workforce is changing at a rapid clip, and forecasts indicate this evolution will only continue. Consider these key stats:

With an estimated 68 million1 underbanked consumers in the U.S., employers must find high-quality, flexible payroll solutions that give employees access to the omnichannel payments ecosystem. And, banked consumers want access to a multitude of financial tools to help them manage their everyday finances, too.2 Banked or unbanked, employees look to employers to provide game-changing payroll solutions – like Paycards – that are invaluable for building a financial system that works for their unique lives.

Retaining good employees is a universal challenge, especially in the restaurant industry. Turnover is expensive, too — estimates indicate hiring and training a new employee can cost upwards of $3,5001. This is why Netspend recently partnered with QSR Magazine to outline simple ways restaurants can leverage their payroll processes to boost employee retention and satisfaction, all while experiencing cost savings.

By Jeff Johnson, Senior Vice President/General Manager—Commercial Prepaid, NetspendIf you’re a typical U.S. employer, about 80 percent of your employees receive their wages through direct deposit to their chosen bank account or prepaid card.1 This is great for employers (more control over “paperless payroll,” and fewer paper checks to generate and distribute) and great for employees (87 percent of employees are highly satisfied with direct deposit).2 BUT—and this is a big but—that leaves you regularly issuing checks to about 20 percent of your workforce and, possibly, more paper checks for miscellaneous payroll events, like 1099 payments, overtime, out-of-cycle payments, bonuses and incentives.

By Jeff Johnson, Senior Vice President/General Manager, Commercial Prepaid, Netspend

Whether you are a Fortune 500 company or a small business, payroll distribution can be costly and complex. Improving your payroll system by making payments electronically could save your business money in processing costs, while making it simpler for employees to receive their earnings.

Today’s workforce is being shaped by a number of factors, including changing demographics and the growing number of millennials, the onslaught of new technology applications, more geographic distribution, the draw of the gig economy and more. Payroll has evolved over the last several decades but, even so, businesses must continuously work to keep their compensation systems up to speed with the changing market. Doing so will increase operational efficiency, and improve employee satisfaction and retention, while keeping costs in line.

Earlier this year, Netspend partnered with HR Daily Advisor to conduct its annual Payroll Solutions Survey, focused on trends within the payroll field. The survey captured insights on how companies are adapting their payroll processes to respond to the demands of millennials, the forms of payroll payments that are most prevalent and opportunities for improvement. Among the biggest payroll issues reported are that respondents’ current processes are too time-consuming, difficult to track or largely inflexible (per one of the respondents, they “assume everyone works a 40-hour work week”).

Netspend Senior Vice President for Commercial Prepaid Jeff Johnson recently spoke with PaymentsJournal about the use of prepaid for small businesses, including how real-time payments and digital disbursements can revolutionize a company’s disbursement model. Jeff shared details on how Netspend delivers a full suite of prepaid options for its clients, focused on addressing cardholder needs while eliminating unnecessary business costs and streamlining operations.