PULSE: Why Debit And Payroll Cards Are An Employer’s Strategic Advantage

In the gig economy, offering short-term and project-based workers payments in the ways they want, and especially when they want, can be a strategic advantage in keeping employees loyal.

And according to Jennifer Schroeder, executive vice president of product management at PULSE, prepaid and payroll cards are proving increasingly popular among forward-thinking employers.

The conversation took place against a backdrop where, as reported in the Next-Gen Debit Tracker, non-cash payments have been rising 6 percent a year, and where payroll cards and debit transactions are gaining ground.

She noted that firms such as PULSE have enabled payments functionality spanning push payments, peer-to-peer (P2P) and business-to-consumer (B2C) for the past decade and that operating rules require funds to be available in customer accounts within 30 minutes..”

That short timeframe between disbursement and receipt of funds, she said, is ideal for the gig economy. Debit, she said, can be a boon for workplaces like restaurants that offer tipping applications (where Schroeder said workers can “pull” in tips at the end of a shift).

And generally speaking, she said, across any number of verticals, advance earned pay for work performed can enable workers to manage cash flow in a world where expense management does not conform to weekly or biweekly pay cycles.

“This is huge in terms of employee retention,” she told PYMNTS of the ability to get paid the same day.

Schroeder said the increasing adoption of payroll cards, and their use — which has grown by nearly 9 percent in the United States between 2015 and 2019 — has come on the tailwinds of high economic growth and high employment. A tight labor market means employers must be cognizant of what their workers want. She contended too, that prepaid and payroll card offerings may prove resilient even in an economic downturn as individuals become more cautious in their spending habits.

“People are more thoughtful about how they spend during an economic downturn,” she told PYMNTS, “and they will spend money they’ve already earned over money that they haven’t.”

The Security Angle

Debit also maintains advantages over checks and other payment options — especially in eCommerce — due to enhanced, improving and tech-driven security.

Schroeder pointed to the recent adoption by PULSE of the FICO Falcon Platform, to underpin its DebitProtect service with a range of fraud detection and blocking capabilities extended across more than 3,700 debit issuers, including real-time risk scoring.

As has been reported, the platform can help issuers manage, or restrict, transactions across groups of compromised cards.

That’s especially important against a backdrop where card-not-present (CNP) transactions account for 1 in 4 debit transactions, but are responsible for over two-thirds of gross fraud cases, as noted by a 2019 Debit Issuer Study from PULSE.

As Schroeder told PYMNTS, “regardless of whether an issuer is participating in our fraud services, we monitor 100 percent of the pinless transactions coming across our network for anomalies.” She said since implementing the FICO Falcon Platform they have seen a 50 percent improvement in blocked fraud, and a decrease in false positives of about 25 percent.

“Debit really is — and always has been — about faster payments,” Schroeder told PYMNTS. “You hear a lot about faster payments in the industry today, but the fact is we’re already there.”