Payroll card provider ADP is updating its technology to provide greater visibility into users' financial health at a time when payroll cards face fresh scrutiny over costs to users.
"We want people to use the card in a way that is driven by choice," says Gary Lott, general manager and division vice president at ADP, which on July 23 released myALINE, a new financial management platform.
The platform offers information for both employees and employers with no added fees, Lott says. It's available for employees of companies that use ADP SmartCompliance and who receive their wages through ADP's ALINE Pay. ADP offers direct deposit, a payroll check and the ALINE payroll card.
Employees can access information about wage payments and use, including transaction-level data, category-specific spending analysis and historical payroll information. The platform also includes a user interface that allows employees to locate and adjust how they view information.
Additionally, for participating employers, employees will have access to their payroll information through the ADP Mobile Solutions App on iOS and Android devices. By late summer, employees will be able to enroll through the mobile app.
For employers, the new platform offers self-service options to update direct deposit accounts, adjust tax withholdings, and access pay period and end-of-year statements. These tools are designed to reduce wage-related queries to human resource departments.
Many of these services were already offered as separate tools, but ADP combined them to improve speed and navigation, Lott says. Most employers will migrate to the new system over the next couple of weeks, he says.
"We want to unify our Web application as we support functions such as electronic payment and online access to pay statements, and access to W2 and payroll card accounts," he says. "We're unifying what has been a multi view experience."
ADP's services are unusual for the payroll card market, says Gil Luria, a vice president at Wedbush Securities. "There is a fairly low level of functionality in this category," he says. "Most solutions just give you the value of the card."
Payroll cards, which are prepaid cards used to pay salaries, are often controversial. In early July, the New York attorney general's office launched an investigation of employers such as Walmart and Home Depot over fees charged on payroll cards.
McDonald's, which offers a Visa-branded payroll card to its employees, was widely panned for creating a sample budget that broke down the cost of living without providing a clear budget for food and assuming unrealistically low costs for health care. McDonald's is also being sued in Pennsylvania for allegedly requiring employees to use payroll cards.
Supporters of payroll cards, such as Kristen Trusko, president and executive director of the Network Branded Prepaid Card Association, argue that payroll cards are a lower-cost alternative to check cashing stores, and many of the fees can be mitigated by using in-network ATMs and receiving cash back at retailers for card purchases.
"Payroll cards are subject to strict regulatory compliance, and that's just the starting point for us," Lott says.
Lott didn't say what fees ADP or its clients impose for payroll cards, but says the new management tools are free. ADP also offers a number of functions for free, such as no fee for up to one withdrawal per week and online bill payment, Lott says.
"We want this to be a very robust financial services tool," Lott says, adding the visibility into account balances is a way to avoid certain costs. "As people look at their transaction history and balance and become more prudent in their budgetary responsibilities, they can be protected from overdraft to some extent," he says.
ADP's new platform adds information that can be useful for payroll card users, says Brian Riley, a research director at CEB TowerGroup.
"Some of the personal financial tools are good, since they can heighten awareness of payroll cards and how they're used," he says, adding many people use payroll cards like a debit card, and that can cause costs to pile up.