Employer payroll card programs could be positioned as a sales opportunity for bank issuers, based on Aite Group research and discussions with leading payroll card providers.

Though payroll brings no direct value to a company's bottom line, the function can benefit from cost reduction.

Payroll cards, which remove costly paper checks from payroll processes while increasing security and providing easy employee access to payment, are helping U.S. companies do just that.

The cards represent an impressive market opportunity for bank issuers and payroll service providers: Aite Group expects active payroll cards to maintain a 19.9% compound annual growth rate from 2012 to 2017, growing from $34.1 billion to $68.9 billion in card loads along the way.

"The opportunity for payroll cards is far more significant than that for direct deposit as the checking account market declines due to checking account fees and changing consumer demographics," says Madeline Aufseeser, senior analyst with Aite Group and co-author of this report.

"Bank issuers can deepen existing business client relationships and expand revenue streams by adding payroll cards to their sales offerings," adds co-author Nancy Atkinson, senior analyst with Aite Group.

http://www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=1043

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