Pay cards, also called employee debit cards, offer a convenient and secure way for employees to get paid. They’re accommodating for people who need bank accounts.
However, some people are concerned about the security of tap-to-go payments. The good news is that digital payment technology offers rigorous cyber security.
Security
What is a pay card? Pay cards are convenient for employees to access their paychecks quickly and safely. Employers deposit funds directly onto an employee’s payment card, which can then be used to make purchases or cash out at an ATM.
A significant benefit of payment cards is that they’re much more secure than traditional payment methods. Most modern cards feature EMV chip technology to prevent fraud by protecting personal data from hacking and skimming. EMV chips create a unique, one-time encrypted code every time you use your card at a merchant. This makes it nearly impossible for unauthorized users to duplicate your card number, so even if your card is compromised in a breach or stolen from your wallet, you’re protected against fraudulent transactions.
Contactless debit cards offer additional security benefits. These cards allow you to pay simply by tapping your card on the terminal at checkout. You don’t need to swipe your card or enter a PIN, making the experience faster for you and the merchant. Additionally, contactless cards generate a unique, one-time code for each transaction, which makes it difficult for hackers to duplicate your card details or track your movements.
Additionally, digital wallets are another safe and convenient way to make payments. Mobile payment apps like PayPal, Apple Pay, and Google Pay connect your bank account or credit card with your favorite mobile device, eliminating the need to carry cash or a physical wallet. Digital wallets use rigorous encryption standards to protect your sensitive financial information from cyber thieves.
Convenience
Employees who receive a payment card can use the money typically included in their paychecks to purchase items and services. They can also withdraw cash from ATMs just like they do with a bank or credit card. This method is convenient for employees because they can immediately access their wages without waiting for a paper check or visiting a check-cashing store.
Unlike traditional cards, which require that consumers swipe the card or enter a PIN to make a payment, contactless debit and credit cards allow consumers to tap the card on a point-of-sale terminal to complete a transaction. This method eliminates the need to hand over a card and reduces transaction time. Contactless cards can also be safer than traditional cards since they encrypt the payment information and send a one-time transaction code to the terminal during each tap. This makes it very difficult for hackers to duplicate this information.
Despite these advancements, credit and debit card fraud is still very common. In fact, according to a June 2021 Merchant Fraud Journal article, card-not-present fraud costs businesses $40 billion annually. However, with advances in cybersecurity protocols, including temporary card verification value (CVV) numbers and EMV chip cards, safeguarding your card and account information is more important than ever to avoid identity theft and other scams.
Ease of Use
Paycards can be more convenient for employees than traditional paper paychecks. They eliminate the need to trek to a bank or check cashing store to deposit a check and then wait to access the funds. Instead, an employer electronically deposits funds onto a pay card to make purchases at any merchant accepting debit cards.
The most popular form of payroll card today is one with a contactless chip. These cards require a touchless interaction between the card and a payment terminal and are among the safest forms of payment available. This is because the microchip on these cards transmits a one-time code each time they are used. This prevents hackers from stealing information from the card’s magnetic stripe or using a skimming device.
When it comes to in-store purchases, a card with a contactless chip can be hovered over a point-of-sale system, such as an NFC reader or smartphone, to complete the transaction. It’s a convenient and fast alternative to the old-fashioned swipe.
A recent survey by TSYS found that convenience was the most important factor influencing consumers’ choice of payment methods. This is good for businesses that want to offer their customers more options.
Mobile Wallets
When you pay with a mobile wallet, you don’t need a physical debit or credit card because the money is stored on your smartphone. This frees up space in your wallet and allows you to make purchases without carrying much cash. Many retailers, including Starbucks and McDonald’s, offer mobile wallets as part of their consumer apps. You can load money onto the app or connect your card and tap it when you’re ready to purchase.
While some people are concerned about security with mobile wallets, they’re more secure than plastic cards. Unlike plastic cards with an identifying magnetic stripe that criminals can read using equipment called a “skimmer,” mobile wallet transactions use encryption and tokenization to keep the information on your phone safe.
Additionally, mobile wallets often require added layers of security, such as a fingerprint or face scan for Apple products and password protection for Android devices. These features help ensure that only the intended user can access your money and information.
Mobile payment options are growing in popularity worldwide as they provide a convenient and safe alternative to traditional methods of paying for goods and services. As the technology continues to evolve, likely, digital wallets will eventually replace standard payments altogether.
