Paperless Pay Discussion with Patrick Koroly, ADP

Agenda  Why companies are moving to Electronic Wage Payments  How to Integrate into your Organization  Choosing a Vendor  About ADPs Aline Pay Card

Fun?? Facts  $36 - $43  55% +  94% Paperless Savings Per Employee/Yr. Sources: The Hackett Group, Payroll Performance Study, American Payroll Assoc. Workforce Management and Payroll Performance Studies, % Americans using a Smart Phone Percent of Dog owners who say their dog makes them smile at least once per day#

Benefits of Electronic Payment Solutions

Four Universal Objectives  HR & Payroll departments are focused on: Increasing operational efficiency Minimizing financial and compliance risk Attracting and attaining quality employees Reducing environmental impact

Best in Class Companies Use Electronic Pay to Cut Costs  An APA published study revealed: Top performers attain 90% electronic pay distribution that costs $41 per employee  Versus 76% by peer group that costs $84 per employee! Top Performers save over 50% in payroll processing costs Top Performers Peer Group 90% $41 $84 76% 0 100% $100 % electronic pay $ cost per employee Sources: The Hackett Group, Payroll Performance Study, American Payroll Assoc. Workforce Management and Payroll Performance Studies, 2010.

Cost of Printing/Distribution  $33 Billion – the amount spent on printing checks each year  Cost of Postage continues to increase  Fed Ex/UPS Charges  Multi-locations = multiple Bank relationships  Misc: check stock, toner, etc…  Payroll Dept’s time to process

Why Move to Electronic Pay?

The Electronic Payment Landscape Is Slowly Taking Shape…

Events

Wage Payments in the U.S. today… the United States…  72% of Americans receive pay via Direct Deposit  Pay Card is a solution for the Unbanked 7.7% of American households are unbanked 17.9% are underbanked – still use check-cashing services

So Why Aren’t More Companies at 90% Electronic?  Many companies hit a ceiling when going electronic  A segment of employees don’t have traditional banking relationships  No means to do direct deposit  Some simply prefer physical check payment  Expanding to this group is perceived as a daunting task  Many cautious about process interruptions and complications  Hesitation with presenting new solutions to Unions

How to Integrate Pay Cards into your Organization

Secure Executive Support at the Initiation of the Program.. Allows the company to realize the full benefit:  Distribution Costs  Delivery Guarantee  Disaster Recovery/Business Continuity 89% of participants in our 2010 Global Payroll Performance Study indicate a high/medium level of executive support but they haven’t been able to leverage it to increase organizational influence…

Position as Employee Benefit  Pay Cards need to be positioned as benefit to employees ●Reduces fraud ●Allows them to take advantage of other conveniences like online bill payment Every attempt should be made to eliminate and/or alleviate changes to/from paycards to paper payments…

Position as Employee Benefit…not only for Unbanked  Pay Cards for the Banked are on the rise – they use for: ●Children in College ●Christmas Club ●Vacation ●Fun money Every attempt should be made to eliminate and/or alleviate changes to/from paycards to paper payments…

 Include it as a part of the Onboarding process  Include it as part of annual benefits open enrollment/and other benefits employees can opt into at certain times during the year Make Electronic Payments a Characteristic of Your Corporate DNA…

Choosing a Pay Card Vendor

Choosing a Pay Card Solution  Key Components:  Branded  Compliant:  Direct Deposit  Pay Card  Self-Issued Checks that can be activated without activating the Card  Convenience/Accessibility to Funds:

Choosing a Pay Card Solution  Cardholder Convenience/Accessibility to Funds:  Large ATM Network Footprint  Access Funds “Pay to the Penny”  Low Cardholder Fees:  Free Withdrawals at ATM per pay period  Free Cash Back (Supermarkets, Convenience Stores…)  Free POS and Signature Based Transactions  Free Cashing of Convenience Checks  Ability to Load Funds onto the Card (Green Dot MoneyPak)

Choosing a Pay Card Solution  Electronic Banking for Cardholder:  Check Balance  Bill Pay  Ability to Transfer Funds  Order Checks, Additional Cards, Report Lost/Stolen Cards  Mobile App Technology  Check Balances and Transaction History  Find nearby ATM Locations ATM Locator  Text and Alerts

Mobile App Technology

Choosing a Pay Card Solution  Implementation  Experience and Resources  Solutions Architect  Customized Rollout Plan  Customized Communications: brochures, letters, s, posters  Multi-Lingual support  Multi Location/Tabling Services to go on site to talk to employees  Dashboards to measure success

Cardholder Average Usage Used? ATM Networks: Primary method used by cardholders to access cash ATM Usage: The average cardholder uses the ATM 2.6 times per month. POS Transactions: The average cardholder conducts 6 debit and 8 signature based transactions per month. Convenience Checks: Less than 1% of transactions are convenience checks.

Best Practices Mandate where allowable  Direct Deposit, Pay Card, Self-Issued Check Incorporate into Overall Culture  Use Cards for New Hires, Bonuses and Termination pay Executive Support Effective Communication Combine with On-Line Pay Statement to reduce costs, offer more convenience

© API Fund for Payroll Education, Inc. Thank you!!