Payroll Card Issuing

Payroll cards are being used more frequently in recent years by employers to pay employees. The employee is issued a card that permits access to an account established by the employer. At the end of each pay period, the employee's ability to draw money from that account is increased by the amount of his or her wages. The card may be used at an Automated Teller Machine (ATM) to obtain cash and in some instances, may be used at a store to pay for goods purchased. The payroll card is particularly useful for employees who do not have a regular checking or savings account at a financial institution because they can access their wages conveniently. Also, if there is no charge for using the ATM, they avoid fees charged for cashing checks. The advantage to the employer is low cost of paying wages and efficiency. The Federal Reserve Board has adopted regulations affecting payroll cards that will become effective July 1,2007. 71 Federal Register 1473 (Jan. 10, 2006). Other types of stored value cards are not affected by the regulation and are generally unregulated by the federal government.Payroll

Since approximately twenty five percent of the United States population does not have a bank account, writing checks has become a less popular means of payment due to the time it takes to write the check and the fact that customers must show identification at time of payment. Retailers generally do not accept out-of-state checks, which limits the usefulness of this payment method.

As far as sending checks to provide funds to family, friends, or employees, most banks charge a substantial fee to cash checks for people who do not hold accounts with that institution. " The average American pays $10.73 per month to maintain a checking account." -- Source, OC Register 3/29/03. Though convenient, debit cards must also be connected to a bank account with available funds. For those who do not have bank accounts and do not wish to establish them for certain reasons, debit cards are not an option.

Credit cards are difficult to obtain because consumers must generally have a job, be a resident and have good extensive credit history to obtain them. Even when obtained, credit cards are useless once they are maxed out. About 55% of consumers are unable to obtain a credit bankcard or unable to use the card once obtained. In addition, credit cards do not offer a secure or convenient means of transferring funds to friends, family, or employees. Because money transfers are sent by mail, draft and postal money orders are subject to loss or theft and the recovery process can take up to two months.

Draft money orders have a minimum fee of $11 that increases with the amount being sent, in addition to a currency conversion charge that the receiver must pay. The sender must provide the name of a foreign bank and address of a specific branch where the receiver can accept the money order. The relatively high charges and restrictive parameters can be prohibitive for many individuals who find these services necessary. Postal money orders are cheaper than draft money orders, at $3 for every $500 sent, plus currency conversions. But there is normally a delay of several days while the foreign bank confirms the transaction with the issuing institution.

Western Union and Travelers Express dominate the electronic money transfer segment and the transfer fee to Mexico using these services is about $15. For transfers from the U.S. to other countries, transfer fees range from $25 to $500, depending on the amount transferred.

Though secure, bank wire transfers are expensive, with fees of approximately $45 plus currency conversion costs. In order to send a bank wire transfer, the sender and recipient must both have bank accounts, which a significant amount of people who need to transfer and receive funds don't have. Competitive Advantages of the Card Compared to its competitors, the Card is obtainable, affordable, secure, convenient, and versatile.