Why Are Companies Adopting E-Wallets For Their Employees?
Businesses are always looking for ways to make payroll processes more efficient and affordable, so it should be no surprise to see a growing number of companies choosing to equip their workforce with e-wallets.
But what are e-wallets and what makes them appealing for organizations as well as individuals? Here is a quick look at the main talking points of this hot tech topic.
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What is an e-wallet?
As the name suggests, an e-wallet is essentially a digital equivalent of a traditional wallet. Of course rather than existing in the physical realm, an e-wallet is a software solution that is capable of housing all sorts of financial information.
As well as being able to double up as a place to keep payment card data, an e-wallet can also store login info and passwords for other types of payment solutions.
This means that e-wallets can be used to make purchases at e-commerce sites, as well as at bricks and mortar retailers when they are combined with a mobile device that has NFC capabilities.
Why are companies adopting e-wallets for employees?
From a business perspective, giving employees e-wallets makes a lot of sense, since it can free them from the restrictions of traditional payment methods, and also afford them more security and transparency when handling important financial transactions.
In combination with other digital services, like an online payroll service and a pay stub maker, it is possible for digital wallets to make all sorts of purchases and payments effectively frictionless.
This streamlining is advantageous to the organization as well as to individual employees, as it alleviates tedious admin and puts all of the payment data in the same place, rather than leaving it fragmented across multiple accounts, cards and devices.
Can companies pay employees through e-wallets?
It is certainly an option for businesses to pay employees using an e-wallet rather than using a more established approach, such as a bank transfer or even a check.
There are some considerations to keep in mind in this context, of course. Firstly, paying salaries directly into e-wallets provided by the organization will require that the payroll solution you are already using is capable of integrating with such a platform.
Secondly, employees may not all be onboard with the idea of adopting an e-wallet for salary payments, rather than just getting this sent to a personal account.
It could be a little like relinquishing a degree of control to their employer, and perhaps seem like an impingement on their privacy, depending on how the wallet is managed, of course.
Tax implications and financial regulations should also be taken into account, as these can vary depending on where your business is based, and could impact the suitability of e-wallets as a payment option for employees.
Advantages of using an e-wallet
There are a number of perks that come with using e-wallets which have already been covered, but other advantages of note include the ability for businesses to incentivize employee loyalty through the way this type of payment solution is used.
For example, branded e-wallets will increase the reputation of your organization and could be combined with rewards schemes that encourage employees to use the wallet for as many of their transactions as possible. This can all link in with the overarching corporate culture you are aiming to develop and nurture.
You could even shape the financial habits of employees for the better, perhaps aiming to boost the levels of saving that are seen among the workforce.
Of course it could all come down to the convenience and security afforded by e-wallets, in which case you might not need to try that hard to sell the idea to team members.
You might even find that many are already using this technology in some form, which could make the adoption process less of a chore to push through.
Disadvantages of using an e-wallet
In spite of all the upsides, e-wallets are still imperfect in a few key ways. Cross-compatibility with all payment platforms, payroll solutions and other software systems you are using now, or are likely to use in the future, is far from guaranteed, for example.
Then there is the potential for the e-wallet provider to charge fees when handling payments, or impose some other limitations on how and where you and your staff use them.
Ultimately, while it may feel like putting all your eggs in one basket, many businesses stand to benefit from e-wallet adoption, even in the face of such reservations.