Madeline Aufseeser, Aite
BOSTON—A new study predicts that payroll cards will finally surpass paper checks this year, and then dwarf their counterpart by 2019.
An Aite Group report found that payment card users (6.0 million) lagged behind those receiving paper checks (7.8 million) last year. But in 2015, those volumes will reverse, with payroll card users expected to total 7.4 million, compared with 6.7 million workers getting paper, Aite predicts.
The decline of paper check users is forecast to continue, leading to only 2.2 million workers getting checks in 2019, while 12.2 million will get their cash via plastic.
“Possibly the most complex product niche in the prepaid card category, payroll cards are swiftly usurping paper checks as employers’ preferred back-up alternative to direct deposit on checking accounts, and they represent one of the largest growth opportunities,” said the study’s author, Senior Analyst Madeline Aufseeser. “Still, market complexities, regulatory conditions, and competing priorities have proved too perplexing for some providers that have opted out of the business.”
This research is based on 2015 discussions with leading payroll card providers and ongoing discussions with senior prepaid industry executives.