In the continual quest to reduce expenses, companies have traditionally focused on the size of the payroll. The actual cost of producing that payroll, however - which includes calculating pay, producing checks, making direct deposits and keeping track of employee information - has emerged as a new arena for savings, particularly since payroll production costs have been rising. Last year, for example, the median cost per paycheck rose 3.5% compared with 2003, according to a survey by the American Payroll Association (apa).
Forbes Magazine, September 2005

We are seeing more and more businesses implement or expand their direct deposit of payroll.
John Gruce, Senior Vice President of Prepaid Card Services, Bank of America, September 2005

A series of reports on the SVC industry by the Center for Financial Services Innovation (CFSI) finds that while still small overall, the SVC market has mushroomed in the last few years. Of the $157 billion loaded onto all prepaid products in 2003, Mercator Advisory Group estimates that general purpose SVCs accounted for 15%, or $23.5 billion. According to the Pelorus Group, approximately 15 million prepaid debit cards have been issued, including payroll cards, and that figure is projected to rise to 34 million in 2005, with general purpose cards accounting for 35%, or 12 million cards.
Banking Strategies -May/June 2005

Consumers' use of debit cards is skyrocketing. Use of debit cards, including automated-teller machine withdrawals, has grown 24 percent a year between 2000 and 2003. By comparison, credit card use was up less than 7 percent from 2000 to 2003, a Federal Reserve report shows. Use of checks shrank during that period by 4 percent. Mastercard® International Inc. Reports that U.S. cardholders last year generated nearly $42 billion in transactions on debit cards, up 33 percent. Through the last three months of last year, Visa® USA Inc. Reported $346 billion in sales volume on its debit cards.
Mary Beth McLaughlin, The Blade - March 22, 2005

Debit Cards a big hit with buyers. They offer convenience for consumers who don't want credit balances. Because of their convenience and widespread acceptance by merchants, debit cards are rapidly becoming the new cash. In fact, for the first time last year, cash and checks account for less than half the payments for in-store purchases, according to by the American Bankers Association and Boston-based Dove Consulting Group. Just five years ago, they made up 57 percent.
Rochester Democrat & Chronicle - January 9, 2005

According to the Federal Reserve system, the number of payments made by check declined between 2000 and 2003 while the number of online and offline debit payments rose over the time frame. Based on two surveys, one of the depository institutions and one of the payment network operators and payment card issuers, the Federal Reserve system (FSR) reports that the number of payments made by check declined by a compound growth rate (4.3%) between 2000 and 2003 while the number of online debit payments grew by a margin of 21% and the number of offline debit payments rose by a margin of nearly 25%. Card payments in general - Credit, Debit and EBT - rose by 13.2% each year over the three year period.
Emarketer - January 7, 2005

Economists long have predicted a cashless society, where digital transactions replace paper money and coins. Now, nearly one in three in-store purchases is made with a debit card, a study by American bankers association and Boston-based dove consulting shows.
St. Louis Post-Dispatch - October 22, 2004

The massive jockeying for position that characterized much of this past year will accelerate in 2004 as stored value service providers scramble for a place in the ever-upward trajectory of the prepaid marketplace.
Matt Mott - Intelecard News Online - August 2004

Plastic paycheck is catching on. Employers like the savings offered by crediting pay to a card. Employees appreciate getting cash quickly. The payroll cards are an outgrowth of stored value cards that contain consumer rebates and gift certificates that carry a company logo. They can be spent or used to obtain cash and can be recharged. The potential market is huge. About $11 billion in payroll payments and $4 billion in benefit payments such as commissions and incentives were loaded onto prepaid cards in 2003, according to a study by the Mercator Advisory Group in shrewsbuy, mass. Such payments are growing at more than 11 percent a year, said Tom Sloane, Mercator's director of debit advisory service. If cards replaced checks issued each year to 130 million employees who lack bank account, are temporary employees, or work at remote locations, such payments could reach an annual $108.8 billion.
Associated Press - June 19, 2004

Debit Card transactions eclipsed credit cards in 2003. By 2006, there will be more debit card accountholders and cards than credit card equivalents. And by 2007, debit card spending will double from today's levels, according to the Nilson reports.
Steve Mott, Banking Strategies - May 7, 2004

In November 2003, Nilson upped its 2007 forecast to $146 billion.
Matt Mott - Intelecard News Online - May 2004

The US prepaid card market has potential to exceed usd 2 trillion and to include business-to-business, consumer-to-consumer and government-to-consumer transactions, according to Mastercard® and Visa®.
Epaynews.com - March 9, 2004

It costs employers between $1 and $2 for every paycheck it processes (and between $8 and $10 to replace a lost or stolen paycheck) compared with 20 cents per transaction for direct deposit.
American Payroll Association - February 2004

Payroll cards are also a way for businesses and financial-services firms to target the "unbanked" population that includes students, part-time or low -income workers. At least 14.2 million households fall into this category. Within that category, about 12.4% are expected to have payroll cards by the end of 2004, up from about 8.5% last year.
Celent Communications - February 2004

Employers are rolling out a variety of "stored value" or prepaid cards that employees can use to spend their paychecks, cash bonuses, flexible spending accounts and other fixed allowances. Workers can conveniently access their funds. Employers, meanwhile, cut their processing, distribution and administrative costs. Payroll, incentive and flexible-spending cards represent the fastest-growing opportunities, but issuers say they are also seeing interest in prepaid cards for general business expenses, such as relocation, travel and other project costs. U-Haul International, Inc. Estimates that it saves half a million dollars a year by moving away from paper paychecks. If the prepaid cards are lost or stolen, the card issuer can immediately cancel or reissue a new card. So, workers have better protections with a prepaid card than if they were to lose a paper paycheck, proponents say. Prepaid cards are also being tapped for general business expenditures. Instead of requesting a cash advance, employees who travel infrequently could use prepaid cards to pay for hotel rooms, or meeting planners could use the cards to reserve conference facilities.
Wall Street Journal - February 12, 2004

Credit, debit and stored value card transactions will surpass cash and checks combined in 2009.
Nilson Report - 2004

Debit, credit, prepaid & commercial transactions are processed at a rate of $32,000 per second. Personal consumption expenditure is about $17 trillion and card programs are roughly 24%. So if you look at that, we're just scratching the surface.
Carl Pascarella, President, Visa® USA - August 25, 2003

Shannon Phelps, Vice President of card products for First Banks, says many corporations want to shift more of their employees to automatic deposit in order to cut administrative costs, but are hindered by the fact that many employees lack bank accounts. Such workers include teens, part-time staff, temporary employees and immigrants. Stored-value cards provide the employer with the same cost savings as electronic payments while making it easy for employees to access their cash.
Lauri Giesen, Banking Strategies - July/August 2003

The number of prepaid debit cards in the United States will surge from 6.2 million issued in 2002 to over 40 million by 2007. The growth will come from an estimated 50 million U.S. adults that do not possess credit cards and the 10 million unbanked households.
Pelorus Group - June 19, 2003

The big debate in the debit world is whether pin-based debit, which is typically processed over regional debit networks, will overtake signature-based debit. Glenbrook believes that pin-based debit usage will continue its strong growth.
Glenbrook Partners - January 9, 2003

For the past several years, US corporations and financial institutions have focused on converting America's payrolls from check to direct deposit. The motivation has been simple: money. Converting to an electronic system can result in cost savings as high as 75 percent. Today, over 55 percent of Americans are paid via direct deposit. However, many employees, especially those without transactional bank accounts, are unable to use direct deposit. They represent a missed opportunity for financial institutions and corporations. Providers of stored value products have leveraged their platforms to develop payroll cards, which capture this missed opportunity. Stored value programs can deliver funds electronically to employees, commonly referred to as the "unbanked", who do not have a transactional bank account. Payrolls may be loaded onto these cards, which are then used to access payroll funds through ATM withdrawals, debit-card purchases and card drafts (checks written on card funds).
Celent Communications - December 19, 2002