Citing rising interest from its clients, commuter benefits provider Accor Services USA has added a prepaid debit transit and parking card as part of its services.
Accor offers employers two options to provide commuter benefits to their employees. Employers that administer commuter benefits in-house may use an option called Commuter Check Office. It is designed for the distribution of nonpersonalized prepaid cards used and disposed of each month. The MasterCard-branded product is not reloadable, and funds come from an employee-paid pretax payroll deduction.
Employers that outsource the administration of their commuter benefit program may use Commuter Check Direct. With this option, employees receive personalized MasterCard-branded cards reloaded each month through pretax payroll deductions. Commuters may link this card to a reloadable transit card such as the Chicago Transit Authority’s contactless Chicago cards.
Accor rolled out a soft launch of Commuter Check in 2008 and added Commuter Check Direct last year, according to Meltem Korkmazel Ustun, vice president of operations for Watertown, Mass.-based Accor Services USA. The company is a division of United Kingdom-based Accor Services.
The company officially announced the products last month in advance of a guideline set by the Internal Revenue Service, Ustun says. The guideline states commuter prepaid cards must “employ terminal restriction technology” that limits the card’s use to specific merchant identification codes for transit and parking. The IRS crafted the guideline in 2006 but has delayed enforcement until 2011, according to Ustun.
Accor, which originally specialized in food vouchers, added commuter-benefit products as they became more popular, Ustun says. Some 1,000 small to midsize businesses are using Accor’s service. “It’s been much more popular than we’ve anticipated,” she says.
The benefit of such cards is the tax break employees receive when using them, says Tim Sloane, vice president of client services and director of the prepaid advisory service for Mercator Advisory Group.
Increased awareness of commuter cards will lead to more employees using them, Sloane believes, noting it also helps if the card can be used to pay parking fees. “That greatly expands the demand for these cards,” he adds.
