SOLE’s Sage Paycard Move

In the world of the unbanked and underbanked worker, access to funds, in a timely and secure manner, can be a bit of a conundrum. Many of these employees, who work in a diverse range of industries, find themselves living paycheck to paycheck but also find that they must pay dearly for convenience, as evidenced by high fees at check cashing and other outlets.

Against this backdrop, many employers have been turning to paycards as a way to make sure that employees keep more of what they earn, while, at the same time, helping eliminate at least some of the complexity of both paying those employees and tracking payments.

One recent announcement in the paycard field has come from SOLE Financial, which operates in the prepaid payroll card market, and Sage Payroll Services, which offers services across accounting, human resources and payroll. Together, they are offering the SOLE Visa Payroll Card, which is billed as a form of direct deposit for the un/underbanked employee without the necessity of bank accounts.

The introduction of the payroll cards marks an expansion of the relationship between the two companies that dates back to 2008, said Erik Farleigh, director of financial institutions for SOLE Financial, in an interview with PYMNTS. Now, SOLE gains access to Sage’s installed base of 6 million commercial clients in the United States alone with the SOLE Visa Payroll Card.

“There are a lot of misconceptions about our industry,” said Farleigh, “and one of them is that people tend to think that we are just like GPR (general purpose reloadable) cards, the ones that you see at retail, and those cards have fees, are not regulated, like a payroll card is. There’s also been lawsuits and negative press,” he added, but pointed out that SOLE Financial stands as one of the companies that is governed by Regulation E, insured by the Federal Deposit Insurance Corp. and backed by Visa’s Zero Liability Policy.

In an effort to bring financial services to the unbanked, the expanded relationship between SOLE Financial and Sage seeks to introduce cards that Farleigh stated are “beneficial to both the cardholder and also at the employer level.” This comes through a multi-faceted push that spans several of SOLE Financial’s business operations, ranging from business development, to back office functions, to a “client welcome call” that brings employees on board (and may be especially advantageous in dealing with those issued cards who speak little English or none at all).

Among the industries that may be most immediately benefited by the Visa payroll card, posited Farleigh, include restaurants, where employees tend to see a significant amount of their income derived through tips (which presents a unique set of issues for backend and accounting processes at these firms). And for employers to issue checks that may be quite small in amount offers an administrative headache, as well as the inefficiencies of paper checks — issues dealt with effectively by payroll cards, said Farleigh.

Another industry that would have advantages from using paycards, said Farleigh, include farming and other agricultural businesses. These outfits, he added, tend to be located in rural areas and are remote from banks or check cashing outlets. They are also typically staffed by workers who may not speak English and who may be wary of traditional banking. The ability to use online and mobile options to complete bill payments and check balances adds convenience, said Farleigh.

For employers, back office functions can be streamlined by the cards, which can be reconciled via spreadsheets that are populated and updated by Sage and SOLE.

The Visa paycard being rolled out by SOLE and Sage, said Farleigh, has added measures of security that can eliminate the risks of holding (and possibly losing) cash. If a card is lost, he said, employers have the option of being issued what Farleigh said “a set of backup cards” that can be activated as a backup to replace that lost card.