A payroll account is a type of account used specifically for employee compensation, whether it’s to do with salary, wage, or bonuses.
These accounts act as hubs for all factors concerning payroll transactions. When it’s time to pay employees, organizations draw directly from these accounts to ensure a streamlined payroll process.
Payroll accounts’ main benefits include keeping payroll transactions secure, while ensuring easy tracking and auditing of transaction history. They’re usually offered by traditional financial institutions, as well as payroll service providers.
Comparing bank payroll accounts and E-wallets
Payroll accounts are offered by both traditional financial institutions and fintechs.
Banks’ payroll accounts tend to be more trusted due to regulatory and security reasons. Another reason may be that the organization in question is already using other services by the FI – adding another layer of familiarity.
With that being said, banks’ payroll accounts are often more expensive and may involve a slower bureaucratic p[process when opening the payroll account or requesting any changes.
On the opposite end are E-wallets, which tend to come with fewer fees, more digital capabilities, and flexibility.
A couple of big concerns that still linger when it comes to E-wallets have to do with security factors and lack of a regulatory framework.
Using payroll accounts for global workforce compensation
Employee compensation gets vastly more complicated on a global scale.
While a bank payroll account may seem like the safer choice, for example, it can come with its downslides for global workforce compensation, including a slower transfer process, time zone issues, regulatory hurdles, transaction errors, and data inaccuracies.
E-wallets, in this case, can come in handy. They can answer the need for speed and accuracy. As well as that, lots of providers allow for opening multiple E-wallets, making cross-currency conversion less of a problem.
With that, it’s important to ensure that the e-wallets of your choice are as or even more secure than bank payroll accounts.