POPULAR ALTERNATIVES TO DIRECT DEPOSIT
For many years, the only people who needed an alternative to direct deposit were those with limited access to traditional banking services. This is not the case. The demand for alternatives to direct deposit is increasing in all sectors of the economy. Many companies are now expected to offer various payment methods to their workers. If you’re a business owner looking for checking account alternatives for your employees, you’re not alone. Here are some solutions that we’ve seen gain more traction recently.
Digital payments
Digital payments through platforms such as PayPal have opened up new payment methods for companies and individuals. These platforms allow you and your employees to connect your bank accounts, so you can transfer money to them by project or pay period.
With PayPal, you decide whether to connect your bank account or a particular card, and your workers have the same choice. In other words, each of you is in control of where you withdraw or receive money and who you send it to or accept it from as a refund.
Paper checks
While paper checks have been around for quite some time, mobile check deposits make them more convenient. Employees no longer have to drive to the bank to deposit their paper checks; they can take a photo of the check on their mobile devices and deposit it using their bank’s mobile app. This may be the best option for a company with very few employees.
For non-banks, this option is more complicated. Banks are not required to cash checks for someone who does not have an account. You also risk check fraud with this method.
Online banks
Online banking has become widely accepted, and even traditional banking institutions have online portals for easy access to funds and services. As the Internet has evolved and security measures have become more reliable, more and more digital banking alternatives have emerged.
Easy
Simple offers consumers a completely online banking experience. The funds are held by Compass Bank and are FDIC insured just like traditional banks. The company offers its account holders a Visa card, cross-platform mobile apps, and an elegant web interface that facilitates a seamless banking experience from any digital platform.
When you transition to online banking, you receive all the benefits a traditional bank offers, like bill pay, ATM access, direct deposit and savings assistance. One key difference is that Simple’s services are more available to people with limited or poor banking histories.
PayPal
PayPal is probably the most recognized alternative to direct deposits. The company accepts payments from a wide variety of sources, and while it has the ability to transfer your funds to a bank account, it can also be used as a bank. With PayPal, funds from a PayPal debit card can be accessed as soon as they are received. In addition to making electronic deposits, the PayPal app allows users to cash checks and have they instantly credited to their PayPal account.
In 2018, PayPal made a move to increase its ability to function as a full-service digital bank. The company allows its clients to have all their paychecks, government payments and tax refunds. deposited directly to your PayPal prepaid card. When you sign up for PayPal, you must choose a personal or business account. As the business owner, you will choose the business account, while your employees will choose the personal account.
Business accounts can sign up for PayPal Payments, which is a bulk payment option that allows businesses to send money to multiple people (up to 5,000) at once. Simply upload a file with your employees’ email addresses and phone numbers, then review and submit your payments. While it’s free to sign up, an instant transfer with an eligible linked debit card or bank account warrants a fee of 1% of the transferred amount, with a maximum fee of $10. Standard transfers are free.
Sending money funded with your PayPal Cash or PayPal Cash Plus balance or linked bank account is also free within the US. If the money comes from credit or debt, however, there is a charge of 2.9% of the amount financed, plus a flat fee of 30 cents.
Western Union
The name “Western Union” is practically synonymous with secure transfer of funds. The company was established in 1851 and has adapted to changes in technology and consumer demand to evolve into a fully integrated digital platform, providing powerful alternatives for people who are not interested in working with traditional banks.
The Western Union Netspend program offers a prepaid Mastercard to which funds can be added via direct deposit, Western Union money transfer transactions, and traditional bank transfers. Employees can start by submitting their name and mailing address to receive a card in 7-10 business days. Once they receive it, they can activate it online or over the phone to confirm their identity.
Transfer fees are relatively high, but you can estimate yours beforehand.
TransferWise
TransferWise is the product of modern entrepreneurs who were frustrated with the cumbersome nature of traditional banking institutions. The company was developed in Estonia and is based in the UK. It is considered one of the best options for individuals or companies with numerous international clients, employees or business partners.
With one of TransferWise borderless accounts, it’s possible to receive direct deposits from people located in a wide variety of countries, including Australia, European countries that use the euro, United Kingdom, Austria, Belgium, United Arab Emirates, Norway, Philippines, Hungary, Hong Kong, Greece. , Latvia and Slovakia.
