Payroll Card Market Size, Share, Competitive Landscape and Trend Analysis Report, by Type, by Organization Size, by End-User : Global Opportunity Analysis and Industry Forecast, 2024-2032

Market Introduction and Definition

A payroll card, also known as a paycard or payroll debit card, is a prepaid debit card provided by an employer to an employee as a method of wage or salary payment, enabling the employee to access their funds electronically. These cards are similar to debit cards and can be used as a payment mode for online transactions, withdrawals of cash at ATMs, and other financial activities. Corporate customers or large firms often use payroll cards to provide their employees with access to funds while they are on business trips or tours. These practices help to streamline the expense management process, enhance security, and deliver employees with an appropriate and flexible way to handle their travel expenses.

Payroll cards are usually loaded with an employee's pay on payday through automated clearing house (ACH) direct deposit transactions. These cards are not linked to an employee's bank account, however, they operate with a separate account, usually offered by a third-party provider. This implies that employees do not require a bank account to participate in a payroll card program. Conclusively, payroll cards are considered a modern alternative to traditional paycheck methods, offering a flexible and often cost-effective way for employees to receive their earnings.

Key Takeaways

• The payroll card market outlook covers 20 countries. The research includes a segment analysis of each country in terms of value for the projected period 2023-2032.
• More than 1, 500 product literature, industry releases, annual reports, and other documents of major payroll card industry participants, along with authentic industry journals, trade associations' releases, and government websites, have been reviewed to generate high-value industry insights.
• The study integrated high-quality data, professional opinions and analysis, and critical independent perspectives. The research approach is intended to provide a balanced view of global markets and to assist stakeholders in making educated decisions in order to achieve their most ambitious growth objectives.

Industry Trends

• In February 2024, Awash Bank S.C, the leading private financial institution in Ethiopia, completed the partnership with Mastercard, to launch the Awash pre-paid cards. The Mastercard-branded international prepaid plastic card. This collaboration demonstrates a significant milestone in Ethiopia’s card business, as the cards allow consumers and merchants to make and receive payments online from any part of the world.
• In October 2023, federal, state, and local government offices use government-administered, general-use prepaid cards to disburse funds at a reduced cost than checks (or other paper-based payment instruments, such as vouchers or coupons, and to deliver an alternative to direct deposit for payment recipients, particularly those recipients who do not have bank accounts. Therefore, government offices contract with financial institutions, known as issuers, to issue prepaid cards, disburse program funds, and provide customer service.
• In January 2023, the Indian government approved plans to foster the usage of RuPay debit cards and mobile payments on its national Unified Payments Interface (UPI) digital payments network. The Indian government stated that the incentive scheme is likely to facilitate the development of a robust digital payment ecosystem in the country. Also, the move comes after the Reserve Bank of India (RBI) and other digital payment stakeholders conveyed reservations over UPI’s zero merchant discount rate. Such strategic developments in Indian economy fuelling the growth prospect for payroll card market. 

Key Market Dynamics

The global payroll card market is growing due to several factors such as the ongoing trend of achieving financial inclusion via prepaid cards, technological improvements in payment technology, and increased focus on better tracking management and expense management. However, the growing popularity of alternative payment methods, such as digital wallets and real-time payments, along with the data and financial risks associated with fraud and unauthorized transactions restrain the development of the payroll card market. In addition, the growing collaboration with fintech companies to enhance card features and ongoing strategies for promoting financial literacy and savings programs in developing countries will provide ample opportunities for the payroll card market during the forecast period.

Payroll cards play a pivotal role in advancing financial inclusion, particularly providing for unbanked and underbanked employees having no access to traditional banking services. This practice may reduce the need to handle large amounts of cash, as well as ensure individuals better track their spending, manage budgets, and save money. Thus, payroll cards lead to improved financial health and literacy, resulting in the rapid development of the payroll card market share. In addition, favorable regulatory environments and initiatives toward saving programs drive growth in the payroll card market. Regulatory frameworks in many regions support the use of payroll cards, providing guidelines that protect employees' rights and ensure fair access to funds to stimulate demand for the payroll card market.

Patent Analysis: Global Payroll Card Market

Although the growth of the payroll card market has been more rapid in recent years, the industry can draw on the earlier U.S. and international experience; code, standard, regulatory, and research bodies; and first responders to make these guidelines on a clear demonstration of novelty, non-obviousness, and practical application. The guidelines are given by the U.S. United States Patent and Trademark Office (USPTO). The U.S. typically has the largest number of patent filings, owing to the rise in prepaid debit card users and the extensive market potential for the foreign-based financial service industry in the country.

For instance, in August 2023, Kazakhstan-based fintech startup S1lkPay secured a patent in the U.S. for its innovative method and system for distributed payment processing by tapping a centralized payment-processing platform. The patent is associated with the creation of a virtual prepaid card linked to a user’s account and tokenized for secure exchange with recipients. With tokenization, the customer can instantly grant access to funds in their account and pay for purchases in split payments.

Market Segmentation

The payroll card industry is segmented into type, organization size, end-user, and region. Based on type, the market is divided into branded payroll cards, personalized cards, and others. As per the organization size, the market is bifurcated into large enterprises and small & medium-sized enterprises (SMEs) . Based on end-users, the payroll card market is categorized into retail establishments, corporate, and government/public sectors. Region-wise, the payroll card market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Regional/Country Market Outlook

The U.S. has been one of the leading countries in the payroll card market, primarily due to its well-developed financial industry, supportive regulatory environment, and the growing number of initiatives aimed at promoting financial inclusion. Payroll cards play a significant role in advancing financial inclusion by offering unbanked and underbanked individuals an accessible and efficient way to manage wages and participate in the financial system. Further, supportive payment regulations ensure that payroll cards are a fair and transparent option for wage distribution, with consumer protections in place to prevent exploitative fees and practices, which support the growth of the payroll card market.

For instance, payment regulations in the U.S. are spread across multiple federal and state regulators, including the Federal Reserve Board (FRB) , the Securities and Exchange Commission (SEC) , and the Federal Deposit Insurance Corp. (FDIC) . These regulations are mainly aimed at ensuring integrity, stability, and equity across the payment ecosystem. It also protects individuals from deceptive practices, maintains financial stability, and prevents fraud and security breaches. Furthermore, the initiatives towards the growing network of cashless economy also promote the demand for the payroll card market across the developed and developing economies, which propels the payroll card market growth.

• In April 2024, China’s government has taken a step to address the gap in financial inclusivity through addressing the significance of financial systems. The People’s Bank of China (PBOC) , in collaboration with other ministries, has issued new guidelines to enhance financial services for both visitors and elderly citizens. These guidelines primarily target to rationalize payment systems and improve acceptance of foreign e-wallets, making it easier for foreigners to participate in economic transactions.
• In 2023, the UK Finance Authority announced that cash usage was reduced to 40% of payments by 2016, and it has reached almost 15% of payments made in cash in 2021. In the same report of the UK Finance Authority, the trade body noted that nearly 32% of adults were enrolled for mobile payments in 2021 and about 92% paid this way in 2022.

Competitive Landscape

The major players operating in the payroll card market growth include ADP, Inc., American Express, Banco Bilbao Vizcaya Argentaria, S.A., Brink's Incorporated, H&R Block, Inc., JPMorgan Chase & Co., Monese Ltd., PayPal Holdings, Inc., Revolut Ltd., and Wise Payments Limited. Other players in the payroll card market forecast include Bunq B.V., Green Dot Corporation, Monzo Bank Ltd., Northwest Bank, Paychex, and so on.

Recent Key Strategies and Developments

• In February 2024, Green Dot Corporation, a leading digital bank and fintech offering seamless banking and payment services to individuals and businesses, announced the partnership with Dayforce, Inc. Through this partnership, Green Dot is now able to better serve as the U.S. banking provider for Dayforce Wallet, the HCM company's on-demand pay solution. Dayforce Wallet is leveraging Green Dot’s BaaS platform – which helps them to provide end-to-end embedded finance solutions for a broad range of partners – to deliver employers and their employees a feature-rich suite of financial services. These include access to earned wages on demand through mobile apps, linked prepaid cards for making purchases, and withdrawals of cash at an expanding network of fee-free ATMs.
• In March 2023, Zil Money Corporation, the parent company of leading B2B payments platforms OnlineCheckWriter.com, ZilMoney.com, and ZilBank.com, introduced an ADP Marketplace app that enables small businesses to use their credit card funds for payroll. Zil Money for RUN powered by the ADP app rationalizes the process of achieving essential funds for the timely payment of employees, lowering financial uncertainty, and mitigating stress for small business owners.

Key Sources Referred

1. Innovative Payments Association (IPA)
2. Global Payroll Association (GPA)
3. American Bankers Association (ABA)
4. The Chartered Institute of Payroll Professionals (CIPP)
5. PayrollOrg
6. Network Branded Prepaid Card Association (NBPCA)
7. International Card Manufacturers Association (ICMA)
8. World Economic Forum (WEF)

Key Benefits for Stakeholders

• This report provides a quantitative analysis of the payroll card market segments, current trends, estimations, and dynamics of the payroll card market analysis from 2023 to 2032 to identify the prevailing payroll card market opportunity.
• The market research is offered along with information related to key drivers, restraints, and opportunities.
• Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.
• In-depth analysis of the payroll card market segmentation assists in determining the prevailing market opportunities.
• Major countries in each region are mapped in the study of the global payroll card market according to their revenue contribution to the global payroll card market statistics.
• Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
• The report includes an analysis of the regional as well as global payroll card market trends, key players, market segments, application areas, and market growth strategies.