Substitutes for Checks Carry Costs

Shannon Buggs reports in the Houston Chronicle on the costs that may be associated with certain payroll debit cards and questions the lack of a savings mechanism on the cards.

Meanwhile, an AP story in the Fort Wayne Journal Gazette highlights the growth that Visa and its member banks are seeing on its payroll card product.

The potential market is huge. About $11 billion in payroll payments and $4 billion in benefits payments such as commissions and incentives were loaded onto prepaid cards in 2003, according to a study by the Mercator Advisory Group in Shrewsbury, Mass. Such payments are growing at more than 11 percent a year, said Tim Sloane, Mercator’s director of debit advisory service.

If cards replaced checks issued each year to 130 million employees who lack bank accounts, are temporary employees or work at remote locations, such payments could reach an annual $109.8 billion, Sloane said.