News & Resources


4 Phases of a Successful Paycard Program Implementation

BY: Jennifer L. Cordes, CPP, MSA | 03/24/22

Direct deposit—100% of the time. It’s a goal for every payroll professional within their company. Having 100% direct deposit translates to no escheatment processes, an immediate return of funds to research and correct, lighter payroll bank account reconciliations, and manageable initiated fund reversals. But how does a company get there? One great way is by offering a paycard program. Here are four phases you need to reach to successfully implement a company-wide paycard program that can help you achieve that 100% direct deposit goal.

1. Discovery Phase
Researching the benefits of whether a paycard program would work at your company and benefit your employees is the first step of the discovery phase. Using search engines on the internet is always a good start but try not to overwhelm yourself. Of course, finding a vendor can be as simple as turning the pages of PAYTECH, the APA’s monthly magazine. PAYTECH contains valuable information about paycard companies nationwide. The APA’s conferences are another great resource that can help you find the right paycard vendor. Attending one of the conferences, such as Payroll Congress, may provide opportunities for one-on-one introductions to paycard vendors. This is a great opportunity for hands-on learning about the product. Networking with fellow attendees about their companies’ paycard programs can provide real-world experience to help find out what has been successful and what the challenges are behind a paycard program.

During the discovery phase, you should list all the needs of a potential paycard program. Ask the following questions before you make a final selection:

  • What is the cost?
  • How do employees receive their paycards?
  • How do employees activate their paycards?
  • What if an employee loses their paycard?
  • Is there a mobile app for employees to access to view balances and make transactions?
  • What role does our company take in managing our employees paycards? Escheatment? Paycard stock/ordering?
  • What support does the vendor offer to employees? Phone, web, mobile?
  • Is the paycard compliant with all federal, state, and local mandates on issuing pay to employees? Consolidate your research to easily compare each paycard vendor and make a well-researched decision.

Now that your company has decided which paycard to launch, it’s time to work with them and other departments to strategically plan how to launch the company’s new paycard program.

2. Planning Phase
Team members from payroll, IT, finance, human resources (HR), treasury, and marketing or corporate communications should be considered to participate in the paycard program implementation. Each of these team members should be prepared to contribute during the planning phase.

The payroll department should reference the payroll processing calendar when considering the best possible date to launch. Collaborating with the finance and treasury departments may be needed to accommodate funding and the month-end closing process. Having a discussion of whether a “soft launch” with a smaller, selected pilot group might also be best before launching company wide. The IT representative should work directly with the paycard company to figure out the specific framework of enterprise resource planning (ERP) integration needed to establish the correct data exchanges between the company and the paycard vendor to ensure a successful launch.

Treasury will work with your company’s bank and the paycard company’s bank to ensure successful and timely funding on the pay date, if not before. Also, you will need to ensure that payroll has access to the banks for reversals and reporting. The HR representative’s role will be to plan how this new process will integrate with new hire onboarding to capture the paycard setup for direct deposit. They should plan how quickly a new hire will receive their paycard to activate prior to their first pay date.

The marketing or corporate communications team will be needed to work with the project team to promote the new program and build excitement among employees before the program’s launch. This excitement should lead to more employees embracing the program. Communication is essential during the planning process as its success affects all employees. Plan to have leadership announce the new paycard program. Display posters internally and on corporate intranets.

Planning is also needed to ensure compliance. During the initial discovery phase, ask if the paycard company complies with federal, state, and local requirements where your employees work. Some states require employees to have an option to receive a payroll check in lieu of a paycard. Thus, some paycard companies include a paper check within their start up paycard packet for an employee to complete and take to a bank to cash if they want to. This keeps companies safe, so they can stay compliant within that state. Know and understand your employees’ options of how they may receive their payroll funds. Then pass this knowledge on to all employees.

Once the planning is complete and a project calendar has been created, it’s time to execute.

3. Execution Phase
Schedule, at minimum, weekly meetings to touch base with every department working on the program’s launch. Each team should report their status based on the timeline. Is the team on time or have there been delays and/or roadblocks? Discuss any issues that may have surfaced and work together so you can get back on track.

The execution phase of a paycard program implementation should include layers of testing: testing by the builders and testing by the end users. Scripts should be written and followed by the different types of users of the paycard program. A test environment should be developed to fully test each step of a new hire, existing employee, and a terminated employee’s role in accessing funds to a paycard. Payroll should be able to fund directly and through integrated automation with payroll processing. Each step within these processes should be tested by the end user. Feedback from the banks and the paycard company is essential in this testing phase.

Successful launches require testing and more testing by all teams.

4. Monitoring Phase
The launch date has finally come, and the paycards have been sent to new hires and any existing employees who have no direct deposit setup. Any anticipated issues have been worked through during the execution phase and all teams are prepared to triage for any given situation that may occur.

During the monitoring phase, some companies choose to have project team members be a part of a support team with a direct line and email to contact for employees to reach out to during the launch date (and even a few weeks after). Your marketing team should communicate this and make assistance easily accessible for employees. This is an important step in the assimilation of any implementation project.

If you adopt these four phases of project implementation of a paycard program at your company, you can ensure success and, at the same time, inch even closer to your 100% direct deposit goal.

Jennifer L. Cordes, CPP, MSA, is Director of Specialized Services at ISS Facility Services. She is a member of the Alamo Chapter of the APA and a volunteer on many APA committees, including the Board of Contributing Writers for PAYTECH, the Hotline Referral Service, and the National Speakers Bureau.