Prepaid payroll cards increasingly used as tool for employers

While digital wallets and fintech apps dominate headlines, the prepaid card – a decades-old payment stalwart – is quietly becoming an important part of modern payroll strategies. As the workforce changes, with a mix of full-time staff, contractors, and seasonal employees, the need for adaptable payroll solutions has grown.

For example, in the hospitality industry, the shift away from cash and rapidly changing consumer expectations for faster payments has left many businesses seeking efficient, secure alternatives for distributing tips. Prepaid cards allow employers to pay out their employees daily without the need to have large amounts of cash on hand and risk that the money will be lost or stolen. It also allows employers to pay workers without a bank account, saving employees fees on check-cashing services.

“There was a time when restaurants paid to have cash delivered just to pay out tips,” said Ben Osmond, senior vice president in Treasury and Payment Solutions at U.S. Bank. “Now, prepaid cards let employees access their tips digitally the same day they earn them, without the risks of carrying cash.”

Grazzy, a digital payments platform, gives customers the ability to digitally tip – whether it’s a housekeeper at their hotel, restaurant waitstaff or a concierge. In March, Grazzy announced it had integrated the U.S. Bank Focus Card, allowing employers to route digital tips directly to a physical debit card. This gives employees more options for instant access to their earnings at the end of each shift.

The U.S. Bank Focus Card is used by many employers for payroll. After funds are added, employees can use the card everywhere Visa® and Mastercard® debit cards are accepted, and can also get cash at ATMs nationwide. Cardholders can manage accounts online or via an app, and receive text alerts when funds are deposited. The card also includes built-in security features and funds are FDIC insured—giving both employers and employees more peace of mind, Osmond said.

But the advantages of prepaid cards extend well beyond the hospitality sector. In the gig economy, where workers often juggle multiple jobs and expect to be paid promptly, real-time access to earnings can make a significant difference in managing daily expenses. Whether it’s a rideshare driver finishing a shift or a freelance worker completing a project, prepaid cards offer a fast, secure way to get paid.

Employers also benefit from reduced administrative burden. Prepaid programs eliminate the need to print, mail, and reconcile paper checks. They also reduce escheatment risk and streamline off-cycle and termination payments with instant-issue cards. The U.S. Bank Focus Card features a comprehensive administrative platform that includes automated card inventory management, robust reporting tools and real-time program oversight—making it easy for employers to manage payroll disbursements at scale, Osmond said.

And because U.S. Bank manages the entire prepaid solution, employers benefit from a single trusted provider for processing, issuing and program management—backed by strong fraud protection and compliance support, he added.

“As the demand for flexible payroll options continues to rise, prepaid cards are proving to be a versatile tool for both employers and workers,” Osmond said. “They are a win-win that aligns with how today’s workforce expects to be paid.”

The Focus Card is issued by U.S. Bank National Association pursuant to a license from Visa U.S.A. Inc. or Mastercard International Incorporated. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Incorporated. ©2025 U.S. Bank. Member FDIC.