Why offer Directo paycards?

The decision to offer direct deposit or expand an existing program begets another question: what to do about employees who don't have accounts. Unfortunately, many can't just walk into a bank and open an account. Bad choices and bad luck put many beyond the reach of what's considered a "regular" bank account, one that offers checks, FDIC insurance, the ability to pay bills electronically and to accept deposits.

Directo paycards are the solution. If you offer direct deposit, your employees are pre-approved. You offer the paycards, and open the accounts at your place of work. These three things remove the first obstacle: fear of rejection. Directo accounts are checking accounts which are managed by a debit card instead of checks. Funds are held in an FDIC-insured bank, and the accounts have all the protection and most of the functions of a "regular" bank account. The accounts can be funded only through ACH direct deposit, and no checks are issued with the account.

For workers, it means joining the banking mainstream. For employers, the payroll ease and savings of direct deposit are finally in reach - for everyone.

Directo paycards provide smart spending tools for the holidays and beyond.

This holiday season, Americans are backing away from credit cards and have even brought back layaway, as heavily advertised by Sears and K-Mart. For Directo customers, smart spending means using their Directocash card or their Directoplus Visa debit card to keep their money safe, while giving them 24/7 access to their hard-earned money, and keeping down costs by tracking balances with online tools and cellphone text balance inquiries.

One Directo customer, Mary, an account manager for a North Carolina manufacturer, told us that since opening her Directo account she has finally been able to save for Christmas. Cash just seems to vanish, she told us, and it's easier to control spending when money is in an account. Directo is grateful for customers like Mary, who spread the word about smart money management with Directo.

Bank rates for consumers at all time high

Banks across the country continue to press the metal to bring in more fee income. The pressure is on - 'big time'.

Without making a political statement here, banks must find more ways of generating fee income. From the expense side, banks are 'staring down the barrel' of Congress and the Fed who may impose 3X the FDIC premiums previously charged. At the same time banks are 'taking heat' from those who believe that overdraft and other bank charges are onerous. With the federal government's involvement, banks must consider changing their pricing (overdraft fee) policies just as Bank of America recently announced.

While all of these issues are being debated, today the South Florida Business Journal online, referenced a Banrate article which illustrates the continual year to year increases in bank fees. Consumers on average are paying higher monthly service fees, overdraft fees, NSF, ATM transaction fees and various interest and non interest checking account fees.

It's no wonder consumers are looking for alternatives. Prepaid cards and payroll cards like Directo's DirectoPlus and DirectoCash cards are on the rise. "We are seeing a greater acceptance", CEO Bob Howe reports.

The next question on the horizon, how will the impending credit card crisis impact consumers? What will be the impacts and outcomes as interest rates rise for the common consumer? Will debit transactions continue to outstrip credit transactions? It sure looks that way.

Time will tell.

Starbucks is testing a payment innovation with big possibilities

The New York Times reported today on a Starbucks app for the iPhone that lets the customer store favorite coffee drink types on a list, then tap on their choice while waiting in line at Starbucks. The iPhone screen then displays a barcode for the barista to scan. Read the story.

You may not be a Starbucks customer, but rest assured that this technology will pop up somewhere in your life soon.

Text Alerts improve customer experience, reduce payday phone calls to your office

This week Directo launched Text Alerts for the Directocash paycard. On payday (or other days the cardholder selects) a text message is sent to the customer's cell phone with their account balance.

There is no charge for this service, and the customer can also edit the phone number online whenever they change phones or providers. They can also request account balances, mini statements, and amount of last direct deposit at any time, for a small fee.

Besides the convenience for employees, Text Alerts will eliminate many of the phone calls that companies receive from employees who want to know if they were paid and the amount of their pay.

Text Alerts are already a hit. Before the announcement emails went out, savvy customers were already clicking through to enroll themselves!

Tools for recovery - the economy, your wallet, your bottom line.

Despite news of economic recovery, debt management is still much in the news. The new, more frugal American is looking for ways to reduce future risk. Today's U.S. News and World Report online has an article on debt reduction that offers five tips. The most interesting one is more psychology than financial know how: You are not your debt. Read the rest here.

Directo offers paycards as well as electronic paystubs, W-2's and online billing. Payroll cost is more than just paper - the time it takes to manage payroll, from payroll production to employee requests for replacement checks and proof of income reduces the productivity of valuable employees. With Directo, your company can drastically reduce these costs and hassles.

I'm excited about a preview of the new online invoicing feature. Email a bill, and give your client the opportunity to pay online! Email to find out more.

NYT: Debit Card Use Increases as Consumers Limit Credit Card Use

According to an August 12th New York Times article, consumers are using debit more than credit cards, accelerating a trend that began before the recession:

"Both in terms of the number of transactions and the total dollar amount spent, debit cards have overtaken credit cards for U.S. consumers. In dollar terms, debit cards are now used for 50.4 percent of all noncash sales, though they have a lower average dollar amount per transaction, according to research from TowerGroup, a subsidiary of MasterCard Worldwide. Those smaller sales are key: debit card sales dominate small purchases like those made in convenience stores, coffee shops and gas stations."

Americans are more concerned with personal spending, and Visa and MasterCard-branded debit cards allow them the same access to retail spending, without the accumulated debt and high interest rates. The article goes on to say that direct deposit participation is at 72 percent now, higher than ever for the U.S., but still lagging far behind Europe.

Direct deposit is a sure way to cut payroll costs, and paired with Directo paycards, it allows your unbanked employees the access to savings, financial security, and purchasing power that comes with a bank account, but without the credit checks and risks associated with brick and mortar banks.

Cutting payroll costs is what it's all about - join us on Wednesday the 5th!

We have a free MyStub webinar scheduled the Wednesday the 5th at 2pm eastern. Drop me a line if you want to join in. In just twenty minutes you can find out how you can slash payroll costs while increasing efficiency. It's simple and once you learn how your employees can benefit you'll want it for yourself!

See you there!

MyStub webinars resonate - now with special offers

We're pleased at the response to the MyStub webinars. We've scheduled three so far, had to add a fourth because of demand, and may put them on a recurring schedule. Since belt-tightening has become a necessity, electronic paystubs are the logical next step once direct deposit (with Directo paycards, of course) is offered. Why print and distribute paper stubs? On payday, employees want to know net pay, and questions about withholding for taxes and benefits are easily viewed online. The savings in time and supplies is eye-opening.

To celebrate the MyStub launch, we're offering two Summer Specials guaranteed to save you even more.

Want to attend a webinar? Email bplatas@directo.net to be added to the list.

Cut costs before cutting staff

The latest Labor Department employment statistics show that U.S. jobs continue to decline. As small and mid-size businesses struggle to deliver products and services with diminished resources and personnel, others fight to keep the team they've worked hard to build.

Among the efficiencies that businesses can employ is the proven cost savings of direct deposit and payroll cards. Find how much your company can save.

At Directo, we've seen paycard use increase, as well as more companies willing to mandate direct deposit. The savings can be significant.

When your provider becomes your competitor...

Gaining a competitive advantage is tough enough without having your provider in a joint venture with your competitor. It came as a surprise when I read this announcement:

First Data (Money Network) and Bank of America created a joint venture to market credit, debit and prepaid cards as well as merchant loyalty, check and eCommerce payment processing to small business, commercial and corporate clients worldwide.

What does this signal to the Regional and Community banks?

Call Directo to find out how we support our bank clients and their paycard needs.

Jim McCarthy
770.810.6502

Chase Staffing makes wise infrastructure investments in lean economy

Longtime Directo customer Chase Staffing has made a number of changes in the past year, increasing efficiency and responding to the market.

They implemented a national Directo paycard program several years ago, then saw a way to cut paperwork and duplicate data entry even more. Last year we integrated paycard enrollment into their Tempworks utility. Cory at Tempworks blogged about it last week.

A wise investment has made an impact in efficiency at every branch, allowing busy branch personnel to spend more of their time placing employees - and making money.

Bad weather and business continuity - put paycards in your toolchest

Storm clouds roil overhead and with one call your foreman has the emergency generator ready to go, just in case. Or snow starts to pile up to the window ledges and you don't have to wonder how your workers will get to the office, because your business continuity plan has a skeletal crew of workers in the building while the rest work from home.

These two scenarios show how business continuity plans are essential to your peace of mind. Even something as simple as making sure that all management has a list of home numbers for all staff can make a difference.

Another simple solution? A Directo payroll card program with MyStub electronic paystubs. You can pay your workers no matter where they are, and because Directo accounts are FDIC insured, with funds held in an FDIC member bank, you know their funds are safe.

Start your plan today! Call Jim McCarthy at 770.810.6505, or email him at jmccarthy@directo.net.

Paycards are just one part of paperless payroll goal

Judging from yesterday's full MyStub webinar, interest in paperless payroll is strong and growing. We at Directo are excited to offer the MyStub electronic paystub, which added to our paycards make any payroll truly paperless. Besides the environmental benefits, the cost savings of electronic paystubs are huge, and with postage going up and service headed in the other direction, it's a no brainer.

If you couldn't log into the webinar or didn't hear about it until today, shoot an email to jmccarthy@directo.net (Jim McCarthy) for an invitation to the next one on July 15th. Guaranteed that your life will change in just twenty minutes.

PEO's and Staffing Companies Hit With Payroll Fraud

The American Staffing Association has issued a warning to its members to be on the alert for companies that create fictitious temporary employees that are paid out of the targeted staffing company's bank accounts. Although the victimized companies are in Georgia, all should be watchful.

Below is an excerpt from the email alert:

Firms Should be Vigilant According to a detective from the Fulton County, Ga., police department, at least three staffing firms have been targeted in an alleged scam by perpetrators in Georgia. The suspects, Nicholas Lee Thomas and Jakim Edward Pearson, allegedly operate Furniture Showroom Inc., Appliance Warehouse, Radiator Warehouse, and Weatherization Inc. According to the detective, they allegedly contact staffing firms to manage their companies' payrolls and then defraud the firms by submitting falsified timecards and names of fictitious employees. The suspects also allegedly remit payments to the staffing firms using checks that later bounce.

At Directo we conduct due diligence on new clients in order to avoid these situations, and monitor accounts to maintain security.

Turning the corner -- we're seeing it already

If you keep up with the news you've noticed that optimism is starting to bubble up from the usual grumbling about the economy. We've definitely seen signs of a turnaround here at Directo. Companies that had pulled back to conserve are hiring again, and many that were frozen into inaction by the downturn are now exploring new ways to save money as they grow once more.

At Directo, we know what it takes to successfully streamline payroll, cutting waste and freeing up valuable employee time through paperless pay technologies. More companies are taking advantage of our years of experience and our innovative solutions. To find out how you can grab some of that optimism for your company, check out www.directocard.com.

Award bonuses with gift cards - a growing trend

An article in today's Washington Post announced the new FDA chief's suspension of their gift card program to award informal bonuses. He wants to be sure that there is a clear criteria for receiving the cards, 160 of which were ordered at $250 apiece "to reward employees for their hard work." They'll start the program up as soon as the chief is assured that everything was done "by the book."

Using prepaid cards for incentive pay is a proven way to reward employees. Rather than run bonuses through payroll, the cards are stockpiled, to be handed to employees when goals are met, or superior performance is rewarded. Cards in small denominations can be used for spur of the moment "attaboys" that increase employee loyalty.

Paperless pay growing in popularity as a way to ease payroll pain.

If you Google "paperless pay" you'll find entries as far back as 2004. In the HR industry, that's practically the Middle Ages. There are many more entries from the last few months, as business diminished from a steady flow to a trickle in the difficult economy. Companies are now looking for a way to reduce expense, and paperless pay seems a clear answer.

Text messaging has grown too, hand in hand with direct deposit and electronic paystubs. In 2004, text messaging was a costly add-on to most phone plans. I recently caught my 82-year-old mother-in-law responding to a text. "Too much trouble to get up and check email," she grumbled. Without knowing it, she'd put her finger right on the source of the growth in popularity of paperless pay--pain and bother.

The early adopters have all been on direct deposit since the beginning. As soon as online check stubs are available, they'll sign up, knowing that they can print one out if and when they need one. Text notifications of account deposits find them where ever they might be, telling them that their payroll has hit their bank account.

For the rest of the employee population, adoption happens when events dictate a change. Several Directo clients adopted paycard programs because of robberies. Employees who would cash their paychecks were mugged and lost all of their cash. Direct deposit was the obvious solution, but because they couldn't open bank accounts, their managers looked for an alternative that would help workers stay safe. Directo paycards were introduced to the employees, and soon became part of their way of life. They were eager to step away from the role of "potential victim" and with Directo's help joined (or rejoined) the banking mainstream.

Meanwhile, payroll costs are rising, and fraud risk has grown. Employers are looking for any way to cut costs while keeping their data secure. Paperless pay becomes the clear answer. Just as texting is now enjoyed by people of all ages and walks of life, so too will electronic payroll delivery. Don't wait until it hurts.

How green is your payroll? Paycards and payroll savings fuel green initiatives.

Going green isn't just about recycling. According to a recent post by Kevin Prow at The Paperless Perspective blog, paycards can save employers $175 per year per employee. Pair that with electronic paystubs, and the savings grow impressively.

At Directo, we've heard from payroll and HR executives who are ecstatic over lowered costs and increased productivity thanks to a Directo paycard program that delivers as promised. Add Directo paycards and electronic paystubs to your payroll program and your company can be totally paperless in just days.

Paycards rules changed in Virginia

Virginia has cleared the way for mandating direct deposit, allowing employers to pay their workers with a paycard if the employee has not supplied bank account information for direct deposit of payroll. The paycard must allow for a free withdrawal or transfer per pay period.

According to the Richmond Sunlight,

"Currently, payment via prepaid debit card or card account requires the affirmative consent of the employee, though such consent is not required if the employee has not designated a financial institution to which payment by electronic automated fund transfer could be made and the employee is employed at an amusement park."

Directo paycards are the ideal solution for Virginia's employers, fulfilling all of the legal requirements in addition to providing outstanding service. Now all employers can take advantage of the payroll savings that direct deposit, maximized by Directo's robust paycard program, can bring!

Earth Day 2009 - what can you do to help?

The "homepage" of Earth Day 2009 is www.earthday.net, which inspires readers to take action and "create a billion acts of green." The site suggests ways to help, from the local (change out incandescent lightbulbs with compact fluorescents) to global (support clean water efforts all over the planet).

We at Directo are proud to be part of the Go Green movement. Eliminate paychecks and paystubs, and you'll make a significant impact. The nifty calculator at Pay It Green
figured out my paper and energy savings if I had only 10 bills and paid 10 employees:

By switching to electronic bills, statements, and payments, you can conserve the following resources in 1 year:

Paper	3.7	pounds of paper saved
Water	36	gallons of wastewater prevented from discharging into lakes, streams and rivers
Gasoline	4.8	gallons of gas saved by not mailing your bills, statements, and payments
Greenhouse Gases	148	pounds of greenhouse gases avoided
This amount of greenhouse gas is the equivalent of:	146	miles not driven in your car
	2	trees planted (and grown for 10 years)
	20	square feet of forest preserved from deforestation

Are you Paying It Green?

A recent email from WACHA quotes interesting stats from NACHA:

• Almost 22 million employed Americans still don't have access to Direct Deposit for their pay. According to PayItGreen, if those employees used Direct Deposit, annually we would save 8.7 million pounds of paper and avoid releasing 25 million pounds of greenhouse gases into the environment. April has been established as PayItGreen Month to coincide with Earth Day, which in celebrated this year on April 22.

The PayItGreen Alliance is a coalition of financial services companies, led by NACHA — The Electronic Payments Association, committed to educating consumers and businesses about the positive environmental impact of choosing electronic payments, bills and statements instead of paper. These facts are the result of a study commissioned this year by PayItGreen on the "positive environmental impact of getting paid electronically by Direct Deposit."

WACHA's email notes that "...although most large companies offer Direct Deposit for payroll, there are still opportunities for them to increase participation from their employees. Even small- and medium-sized businesses can reduce their carbon footprints by paying their employees via Direct Deposit instead of by paper check. If a business that employs just 300 people and issues paychecks every two weeks switched to Direct Deposit, it would save 121 pounds of paper and avoid the release of 346 pounds of greenhouse gases into the atmosphere in one year."

You can check out the environmental impact of your own business by using the Direct Deposit Environmental Calculator on www.payitgreen.org.

"What large and small companies don't realize is that by offering Direct Deposit and maximizing participation, they not only are helping to save the environment, they are also saving their companies significant money," said Angela Ceccarelli, vice president of marketing for HSBC Payments and Cash Management in New York, and a spokesperson for PayItGreen.

Directo payroll cards can help your business achieve total direct deposit, by allowing all employees to participate, regardless of credit history or "bankability." Use Directo's online payroll savings calculator to see how much your company can save.

Businesses can go beyond direct deposit by paying bills electronically, and by switching to electronic bills and statments, all of which an also be used by consumers. To help customers increase their savings, Directo now offers electronic paystubs. Find out more - send an email to Jim McCarthy (jmccarthy@directo.net).

An ATM skimmer, deconstructed.

You've probably heard the warnings about ATM skimmers, the little devices that can be put on an ATM to read your mag stripe and capture your account info.

This blog in the Netherlands has taken an ATM skimmer apart and shows in detail how it's put together. I thought I'd be able to spot a fake, but it's scary how real it looks. AT the ATM, look for anything out of the ordinary, such as mismatched paint, scratches, and ill-fitting components. If it looks like your cousin Larry made it in his garage, then it's suspicious. Luckily, ATMs serviced by banks have little chance of being hacked this way. Amazing that this one seems to be located on a street.

Click on each picture for a clear, larger version of the image.

Here's a picture of the device removed from the ATM:

and this is a closeup of the faceplate:






There's a tiny camera mounted inside of it. The aperture is where the man's middle finger is. While it swaps your magnetic stripe info, it also captures your fingers keying in your PIN.



See the camera lens hole?








And here's a shot of the ATM with the fake piece in place. Scary, isn't it? If you can read Dutch, head over to the original blog, which you can find here, as well as photos of the gadget's guts.

Not afraid of paper checks? You should be.

The economic downturn is exposing crooks that had managed to escape scrutiny until now. Belt-tightening has caused businesses to examine process and procedures, trying to find ways to cut costs, and they're finding phantom employees, receipt skimming, fake vendors - all bobbing to the surface like bodies in a horror movie lake.

Here's an interesting article by CPA Timothy Dayles about how to address risk in businesses. The article, which first appeared in "Smart Business Cleveland" in 2007, lists ways that businesses can assess risk.

Checks are vulnerable to fraud at every stage, from the box of blanks in your supply closet to your distributed payroll checks, all the way to the canceled checks you may still get back in the mail. Thieves can make new checks with your existing information, wash a payroll check and fill new amounts and payees on it, even sell your banking information. You can cut paycheck risk completely with a Directo paycard program.

Directo provides secure online enrollment, eliminates the need to reconcile, makes payroll corrections easier and does away with the risk of lost checks and fraud. It's FREE to the employer, and employees appreciate that Directo never checks credit, and that the robust paycard program lets them access their account information online or by telephone, gives them 24/7 access to their money via ATMs, retail point of sale, and electronic billpay, and all the benefits of direct deposit without ever having to step into a bank.

Give your company a big dose of security. Call 770.810.6502 - Jim McCarthy will answer your paycard questions, and your Directo paycard program can be online in just days.

No obligation. No cost. No risk. Today, those are sweet words indeed.

Thought you understood who the Unbanked are? Think again!

I recently read a synopsus of a report by Aite Group LLC. It's titled "Debunking the Myths About the Unbanked and Underbanked".

The article written by their research group, illustrates the fact that Underbanked people are not unbanked for cultural or attitudinal reasons yet for more practical reasons. Credit problems and cost issues seem to be the drivers in a study performed in Aite's survey with check cashing customers.

As a result, it's up to the marketer to present a better price/cost solution for this consumer.

Directo serves this marketplace with a low cost, convenient and safe payroll card at the worksite. For over 10 years, Directo has been 'carving out a niche' helping low income, unbanked people obtain access to basic financial services such as ATM, POS and mobile financial offerings. http://www.directocard.com/.

Directo's commitment is to offer its program with savings of 50% or more over traditional check cashing services and is a viable alternative for serving this segment of the population. It's program are also less costly that Wal Mart's walk-in services
BH

Privacy and Direct Deposit

By now, most companies are aware that a direct deposit program can cut their payroll costs significantly. It's tough to convince some employees to participate. Rumors abound about how evil companies can siphon cash out of the unwary employee's account, causing some to hold tight to their paycheck-cashing ways. Others love to receive their paycheck out of long habit, or as one worker told us, because he felt that his hard work was validated when his supervisor looked him in the eye and handed over the paycheck. He soon felt just as validated when his bank account received a deposit on payday, and he didn't have to visit the bank on his thirty minute lunch break.

It surprises some in the payroll and HR departments when a direct deposit mandate suddenly reduces paychecks by as much as seventy-five percent, all from employees who had bank accounts but weren't willing to participate in direct deposit. Directo paycards can fill in the gap for the remaining workers who cannot get a bank account due to bad credit and other reasons. Many times, employees with privacy concerns opt to open a Directo account to receive their direct deposit pay, even if they already have an account with another bank. Directo never checks credit, and statements are online, so there's never correspondence with the account number in the employee's mailbox.

If you want to increase direct deposit participation, a Directo paycard program will make an immediate, successful impact on your bottom line!

Facts are showing prepaid cards and payroll cards are better for some

A recent study by Lightspeed Research as illustrated in a whitepaper by Aite Group LLC, further supports the notion that Prepaid Cards and paycards or more commonly referred to as payroll cards, are in fact a better product than traditional checking accounts for 14% of the banked population.



This is a real threat to banks who arguably may be providing the wrong product for their low end customers. Or perhaps they are providing the right product at too high a price. Banks must find a way to profit from each 'strata' of customer that they serve. The article suggests that Banks and financial institutions can actually win in this category by partnering with companies that are successful, marketing in this markeplace.



For 10 years, Directo Inc. of Atlanta has been 'carving out a niche' in providing payroll cards and prepaid cards to the unbanked and low wage earner. Helping over 250,000 with basic banking needs, Directo is growing its business by helping over 70 banks, assist their customers or workers of corporate customers in this arena. for more information see http://www.directocard.com/.



Aite Group LLC is a leading and relevant research and consulting firm serving the financial services arena.

Cash Advance Loans vs Saving for Emergencies --- a no-brainer

Your employees may be using short term loans to make ends meet. This two minute informative video from bankrate.com shows the pitfalls, and offers alternatives:

http://www.bankrate.com/dls/news/chk/video-check-cashing-service-a1.asp

Your workers can open a second Directo payroll card account for savings and emergency funds, painlessly saving through direct deposit. To find out more, or to start a Directo program at your business at no cost to you, email Jim McCarthy today at jmccarthy@directo.net!

Make sure to check that receipt!

As more people use debit cards (such as the Directocash paycard) for small purchases, more merchant errors are bound to happen. South Carolina resident Guadalupe Pequino's story isn't typical, but it's a reminder to glance at your receipt to make sure it matches your total purchase price. Ms. Pequino bought $8.64 at a local Burger King with her Bank ofAmerica Visa Check Card. The cashier keyed the amount in twice, resulting in a $8.648.54 total. The WDSU report went on to say that the amount was debited from her account, and that it took 5 days for her balance (minus the $8.64, we suppose) to be returned to her account. During those five days she couldn't pay her rent, make her car payment, or even buy food, according to a friend of Ms. Pequino.

What the article did not explain was that in these cases the merchant has to settle the claim. If she reported the mistake on Thursday afternoon, and the Burger King issued a credit the next day, Friday, then the money could not have been in her account any sooner than Tuesday, because it takes two days for it to settle, and transactions don't settle on Saturdays and Sundays.

Check your receipts in the store, folks, while mistakes can be easily reversed.

Need to reduce debt? Directo's paycard can help.

Directo payroll cards can be an important tool for reducing debt. By signing up for direct deposit, money is in the bank on payday, rather than cashed, removing the temptation for unplanned spending. Billpay can be done automatically, saving money and time.

For those working on debt reduction using a plan such as the Dave Ramsey program, the paycard account will prove valuable as credit card or loan's monthly balance shrink, the minimum paid along with the extra amount gained from the snowball.

If you or your employees already have bank accounts, consider opening a low cost, secure Directo paycard account to manage your money as you go through the debt reduction program. From stashing $1000 away for emergencies to paying down creditors, Directo will be there every step of the way, ready to answer questions and provide help. Your money is safe with us, and now you can watch it grow. Learn more at www.directocard.com.

More free ATMs in the UK, but what about the US?

The March 5th issue of ATM & Debit News reports that UK-based Bank Machine, Ltd. is going to double the number of surcharge-free ATMs that they offer. They operate 2,000 surcharging ATMs and 250 free ones. The 250 additional ATMs will be added in low-income areas to fill the banking gap left by banks that have abandoned less lucrative locations. ATMs located in stores may be partially subsidized by rent from retailers, on the assumption that the machine will draw traffic.

This is an idea that needs to spread to the United States. The UK machines are typically installed in "hospitals, universities and military bases." ATM users will have the safety of accessing their money in a safe location, while the ATM owner is shielded from the vulnerability of a street-side machine.

Bank Machine Ltd. is owned by Houston-based Cardtronics.

Sometimes banks aren't what folks want

The article below from the American Banker warrants reviewing. Those groups or institutions that are serving the low income and unbanked commuities must recognize that there are very good alternatives and better mousetraps to serve this expanding market.

Viewpoint: Don't Overlook the Role that Nonbanks Play

By Joseph Coleman, American Banker Friday, March 6, 2009

Why is the Federal Deposit Insurance Corp. determined to recreate the wheel when it comes to serving the financial needs of low- and moderate-income consumers?

The FDIC's Advisory Committee on Economic Inclusion's most recent meeting highlights many of the challenges and shortcomings associated with the ongoing efforts to convince millions of Americans that they are better served by using banks and other mainstream financial institutions than alternative providers.

The financial service center industry, with 13,000 locations nationwide, conducts more than 350 million transactions each year. These companies are regulated by a variety of federal and state laws. The transaction-based model for accessing day-to-day financial services is well established and functioning efficiently on a cost-effective basis.

Perhaps more importantly, millions of people use these alternative providers, not because they have to, but because they chose to. Stores are located in neighborhoods, keep convenient hours (up to 24 hours a day, seven days a week), have friendly employees who speak the customer's language and offer a wide array of services.

Through new technologies, many stores that belong to my organization, the Financial Service Centers of America, have expanded those opportunities to include "virtual bank accounts" that offer FDIC-insured savings options with a 5% interest rate tied to a prepaid debit card.

A national customer satisfaction survey confirmed the popularity of financial service center. It found that 92% of respondents rated the overall value of products and services received at centers from "excellent" to "good" for the money. In addition, 95% of respondents rated the overall quality of services from "excellent" to "good."

Two recently published reports by Aite Group ("Debunking the Myths About the Unbanked and Underbanked") and the FDIC ("Banks' Efforts to Serve the Unbanked and Underbanked") highlight common misconceptions about this market segment and the shortcomings of banks to adequately serve it. For example, Aite Group said its study "reveals that people are unbanked for very practical reasons, including credit, pricing, cash flow and service issues." The FDIC study found that more than 70% of respondents "have not identified" expanding services to the underbanked as a priority.

The Advisory Committee on Economic Inclusion is exploring the value of expanding government incentives to help banks serve the underbanked.

What is most perplexing is that even with the financial service center industry's solid record of service to this market segment and the inadequate performance of banks, the FDIC has repeatedly rebuffed my group's efforts to participate in the committee.

One area where we could be of particular assistance is with small-dollar loans. Financial service centers handle about $13.2 billion of these loans each year. The FDIC itself has acknowledged the need for such a product by implementing its Small Dollar Loan Pilot Project.
It is important for policymakers and those who advise them to have solid answers to the following questions:

-What are the standards for judging the success of the FDIC's pilot program?
-Can the bank model for small-dollar loans be economically translated to the current volume nationwide?
-What levels of loan losses are being reported by participating banks?
-Are banks' pilot programs profitable, sustainable and scalable?
-Is the FDIC granting banks relief from existing loan-loss reserves for this product? (Subprime loans require a 25% capital reserve.)
-A core question to consider: Is it better for consumers to have access to banking services or access to banks?

The FDIC should work to create a collaborative, inclusive environment where banks and financial service centers can work together to provide the services customers want and expect.
Coleman is the chairman of the Financial Service Centers of America.
© 2009 American Banker and SourceMedia, Inc.

Directo provides an alternative to this market at the worksite. Payroll Cards. www.directocard.com

Direct Deposit/Banking Service for Spanish Speakers

By Ferney Colorado & Melissa Burkhart

Many employers and HR managers have long noted with great frustration that their Spanish-speaking employees tend to be very reluctant to sign up for direct deposit of their paychecks. The advantages to an employer of having at least the majority of their staff on a direct-deposit system are considerable---greatly reduced costs for paper products, improved efficiency in payroll departments, greatly reduced chaos on payday, etc.

While these are very significant issues to many companies, the growing risk of check fraud makes it yet much more urgent for companies to find a direct deposit program that will meet the needs of all employees. Unfortunately, check fraud is relatively easy to commit, especially when employees cash their checks at smaller venues, like check-cashing operations or liquor stores. A common practice is for several people to present forged payroll checks at a local bank and attempt to get them cashed. It is easy enough to make forged copies of a legitimate paycheck and them and then modify only so that they will correspond with false identification.

Because of the volume of transactions that banks and check-cashing outlets process daily, as well the limited resources available for training bank personnel to recognize the latest fraud techniques, preventing this crime can be extremely difficult. Therefore, a growing number of banks make the effort to protect themselves from payroll check fraud by making it difficult or expensive for the individual to cash checks. This practice obliges ‘unbanked’ workers to cash checks at ‘fringe’ financial services outlets, liquor stores and the like---which can expose employers to increased risk that the fraud will occur in the first place.

For company management, it is very easy to see that a direct deposit program that serves and meets the needs of immigrant or transient workers is the ideal solution. Fortunately, Directo, an Atlanta-based company, has introduced a low-risk direct deposit program that is customized specifically for unbankable workers. Furthermore, Directo has gone to great lengths to bring foreign workers on board with this concept. Directo is aware that workers from Latin America in particular have a great mistrust of financial institutions and a strong preference for saving and spending money in cash. This is a result in part of economic instability in many Latin American countries. Spanish speakers will be very reluctant to trust a paper statement telling them their account balance and would far prefer to determine their own balance by counting bills in their hand. Often this mistrust is so strong that even those Spanish speakers who are eligible for a bank account will choose not to have one.

To assuage these doubts, Directo starts by providing literature, training, and customer service in Spanish. They also consult with Futuro Sólido USA http://www.futurosolidousa.com/ as to the best communication strategies for laying to rest Spanish speakers’ typical fears and misconceptions. With such a clear, concrete, multi-step, roll-out process, both companies and their employees are very happy to find that they can achieve significant savings and greatly enhanced security with Directo’s program.

The advantages of Directo---for both business owners and employees speak for themselves. Some of them are:

For Business Owners

Eliminates the risk of exposing the company corporate account number in environments where it might be vulnerable, such as check cashing outlets, which gain access to the bank account number.
Eliminates the risk of overdrafts because the company controls when the payments will be distributed
Eliminates the all-too-frequent chaos on payday, when employees often attempt to end a work day early, crowd into the office to receive their checks, and rush to the check-cashing establishment before it closes
Increases the company’s efficiency by eliminating lost checks or paper check production and administration.

For Employees
Greatly reduces the risk of loss from theft since many unbanked workers carry large amounts of cash on their person and accumulate their savings in cash at home
Eliminates the cost, as well as the time, associated with cashing checks
Increases access to the privileges, safety, security, convenience and other benefits enjoyed by banked workers
Greatly reduces the cost of sending money to family members in their country of origin, as Directo cards are used internationally at ATM's and this transaction is offered for a very modest flat fee---rather than a percentage of the amount being transferred

Furthermore, by sending money to their home countries by traditional means, immigrant workers also face potential fraud themselves that their employers are entirely unaware of. Many express concern that the personnel at the establishment where their wives or mothers are to pick up their cash will not be able to resist the temptation to pocket a bit of it. Once enrolled in this service, these workers enjoy the automated system that guarantees that the family they are supporting in their home country will receive exactly the right amount of money, according to the most current exchange rate.

Programs like Directo enhance a company’s benefit package at no cost whatsoever to the employer. Furthermore, when a company provides a system that so clearly has been customized to meet the specific needs of immigrant workers, those workers sit up and take notice. Their impression (although usually incorrect) of benefits in general is that these packages are not designed to meet their needs---but rather the needs only of the company and of those employees who were born and raised in this country. A service like this will go a long way towards demonstrating to them that this is not at all the case.

Ferney Colorado and Melissa Burkhart are dedicated to provide understanding and value of benefits programs for Spanish speaking workers. For more see http://www.futurosolidousa.com/.

Directo is a leading provider of payroll cards for the unbanked worker. Founded on the notion that there is a better way for Spanish speakers to receive and keep their hard earned pay, Directo celebrated its 10 year annivesary in November of 2008. http://www.directocard.com/

Make a Referral - jump start the economy

I'm pledging to make a referral to a business I want to help as part of a national campaign to make 1000 referrals March 9-13. What a great small business stimulus plan.

View >>

Postal rates rising again - online billpay use rises, too

More consumers are paying bills online today, and with postage rates about to climb again, those who are still mailing checks and money orders are going to take a second look at online bill pay.

For the average consumer who pays 12 creditors a month, the savings are significant:

12 $.44 stamps: $5.28
12 $.50* money orders: $6.00
Total: $11.28/month which total to $135.36/year
Add the cost of a box of envelopes: $20.00 ----------Annual billpay cost: $155.36/year

Cost of paying the bills online - ZERO

- if you have access to a bank account that will allow you to debit for your bills.

Those who do not qualify for bank accounts can open a Directo paycard account, if their employer offers direct deposit, or if they receive government benefits. Directo accounts are easy to use, and will save the accountholder hundreds of dollars a year - with online billpay, decreased fraud risk, and 24/7 access to their money.

If you're an employer, contact us to offer Directo paycards. It costs you nothing, and for your employees, the accounts could mean significant savings.


*money orders range in price according to the vendor and the dollar amount. $.50 is least expensive I found (Racetrac gas store). A postal money order from the post office for $1,000 was $1.50. Money orders must be purchases with cash - which adds risk of theft to the transaction -ed

Unemployment Debit Cards. Good intentions with pitfalls?

The Associated Press today released an article about some of the pitfalls of state governments's wonderful idea to implement debit card programs for recipients of state unemployment benefits. (see below):
____________________________________
AP IMPACT: Jobless hit with bank fees on benefits

Associated Press - February 20, 2009 12:43 AM ET
A new analysis shows many unemployed Americans are having to pay just to collect their own unemployment benefits -- or pay to call customer service to complain about it.

A review finds that 30 states have struck debit-card benefit deals with banks that include Citigroup, Bank of America, JP Morgan Chase and US Bancorp. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20.

A Democratic state lawmaker in Missouri has received a wave of complaints about the fees from autoworkers laid off from a suburban St. Louis Chrysler plant. She's urging a statewide review an eye toward reducing the fees.

With the national unemployment rate now at 7.6%, the market for bank-issued unemployment cards is booming.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
___________________________________
Here is another example of the banking industry's attempt to bring a solution to states in order to lower costs of distributing payments. Did they accomplish this objective? Probably yes. But do they really care about the unemployed recipient? Aren't they really after the millions of unemployment cash deposits to stash in their banks for the state? You bet!

Along with the ability to earn intesest on the deposits - at low interest rates these days, how do banks make money? Afterall, one can only assume that the low bidder with the most influence won the business. The simple answer is fees, fees and more fees as illustrated in this article.

How do they maximize fees? Oops, someone forgort to look into the notion that banks are very territorial about who uses their ATM's for free? Not my customer? Thank you for that $1.50 - $3.00 per transaction. The other way to collect fees is the oldest banking trick in the book. Give 'em free checking and the case of unemployment cards, whammo hit 'em hard with NSF and Overdraft fees.

Is there another solution? Frankly the notion of issuing payments to debit cards like the unemployment dispersement and entitlement programs described above is a good one. Moving to electronic payment methods is more efficient, cost effective and less risky for states and the recipient. But for this Blog, states must negotiate the best deal AND read the fine print to so that the people who need the money most at these challenging times, their previously employed TAXPAYERS can maximize their cash benefits.

Directo offers a bank debit card program for recipients of unemployment and entitlement benefits. It's philosophy has been to fully discloses fees which are typically a fraction of the "free or low cost" bank programs. Directo also offers low cost banking solutions (pay card, or payroll card) for workers who cannot or chose to not use a traditional bank account to receive direct deposit of pay.
BH

Positive Pay - Is it enough in these times? In the end, who gets hurt, really?

In these unprecedented times in banking, financial institutions now more than ever are reassessing relationships and in many instances, resetting the terms and lowering their risk with certain customers. In fact many financial institutions are demanding that certain customers change the way they do business.

Here's a scenario that the bank and company are trying to avoid; Outside a check casher, a fraudster waits for an innocent customer to arrive. The fraudster says, " Hey mister, there's a long line in there and you don't have all the time in the world. Let me cash this check for you. In fact, I won't charge you. I'll stay here and cash it with the rest of my checks." The innocent transaction takes place and the customer is on his way with cash in hand.

Meanwhile the fraudster takes the check, copies the check's microcoding with the company's bank and routing number. After a quick trip to the office supply store to purchase blank check stock, he then creates several other checks using the company's bank information. He hires a few people or in some cases, dozens of people to cash the fake checks all over town. He takes his 'profits' and hits another innocent person and company.

So who pays for this scam and the loss of thousands of dollars? If the checks clear through the banking system, the company typically ends up 'holding the bag' and absorbing the losses.

To curb this fradulant activity, banks offer a popular service called Positive Pay. From the Wikipedia definition of Cash Management "Positive pay is a service whereby the company electronically shares its check register of all written checks with the bank. The bank therefore will only pay checks listed in that register, with exactly the same specifications as listed in the register (amount, payee, serial number, etc.). This system dramatically reduces check fraud."

A bank's Cash Management Services organization is typically responsible for educating, selling and providing a Positive Pay solution to its customers. Once implemented many of the problems of check fraud disappear. But is the company totally out of the woods? What if this same fraudster hits again?

While it is true that fraudulent attempts may continue in some form, at least the bank and company are protected. With Positive Pay fraudulent checks are returned to the merchant. It's the grocer, check casher, liquor store or merchant that has decided to take the risk to cash the check. They then take the loss in this case. Somebody has to pay.

But there is more to the story, particularly for low income people. The 'unbanked' also takes the hit! Why? Because when the merchant cashes a fraudulent check from a company, the next man to attempt cashing a check may be turned away, or to make matters worse, paying an exorbitant amount just to get his hard earned paycheck cashed. Ultimately, who gets hurt, really?

And so while on the surface the company and bank have reduced their risk, what have they done to their workers, the individuals who are now paying more to get their checks cashed?

Companies must consider the ramifications of Positive Pay to the entire 'food chain' of payments. Some have looked to Directo paycards to help mitigate the risk and help their workers. Again, in the end, without a program like Directo, who gets hurt, really? Your workers, and you.

BH
http://www.directocard.com/

Employees using paycards to control spending

Employers who offer paycards are finding that even employees who have traditional accounts are taking them up on the paycard offer. Low cost paycards are increasingly used to split direct deposits into two "spending buckets," using each for a different purpose, such as one for paying down loans and credit card bills and one for day to day expenses, or even a holiday savings account.

Directo paycard programs cost employers nothing. You can support your employees' debt-reduction or savings efforts easily, while reducing payroll costs and fraud risk. Directo's fast implementation means you can be check free in two weeks. Find out more at www.directocard.com.

Is your Banker really your friend? It may be time to simplify with Directo

It occurs to me as more and more people are hurt by the economic downturn, their traditional 'brick and mortar', mainstream bank may not be your best friend. While the Congress and the Treasury are bailing out banks (who made too many bad decisions while cashing in big bonuses), who is helping you when you are trying your best to keep your financial head above water? Are mainstream banks looking out for you?

And what is the old adage? When you don't really need money, your bank would love to provide a new loan, mortgage or credit card? But when you are hurting financially, when you need the flexibility and financial assistance, the bank is all to happy to say NO to you and your loan application. Meanwhile to make up for losses, banks put their Overdraft and NSF program policies in high gear. Armed with sophisticated banking software, banks are ready and willing to pounce on your first mistake. This is not the time to be 'living on the edge' financially with your checkbook. One can easily run up $28 - $36 per occurance Overdraft and NSF fees when your checking account was short this month. Has this ever happened to you?

It may be time to consider simplifying your banking needs. Consider a low cost Directo 'checkless checking account' with its accompanying DirectoCash debit card. Rid yourself of high cost checks and the mounting associated fees. Get back in control with an account that doesn't care if your minimum balance is $10 or $0.10. Work with a company that understands there may be a better way to access your funds, without the customer 'no service' hassles of a big bank. Use the product to shop or take money at the ATM without NSF or Overdraft fees.

Is it time to simplify?
BH

Unbanked? Need an account? Your local bank may not be able to help, according to the FDIC.

According to the American Banker, the FDIC released a study last Thursday that says 73% of banking institutions polled knew about “unreached populations” in their regions, but 70% did not think that extending services to them was a priority.

The study goes on to say that most banks offer basic financial education, but that’s it. Interestingly, only 14% of the 700 institutions surveyed said that they offered payroll cards through their business partners. Payroll cards offer benefits to both employers and their unbanked workers, cutting payroll costs while offering financial security for employees.

Directo’s paycard offers all of this and more, allowing unbanked workers freedom from check cashers as well as the safety of a bank account with funds held in an FDIC member bank. For banks that wish to expand their product offering to commercial clients, the Directo paycard program is an easy win which costs them nothing, is supported entirely by Directo, yet earns them goodwill from the community and CRA credit. - ed

FDIC Vice Chairman Martin Gruenberg is quoted in the article, saying “Many banks don’t actually have strategies in place to target and reach out to those populations effectively…a market opportunity that…in many cases isn’t being fully taken advantage of…” and that although accounts are available for the unbanked, they’re limited and don’t meet the needs of unbanked people, such as low fees, and being able to accept direct deposit of payroll.

It’s tough being unbanked in today’s harsh economic climate. With Directo, relief is just a paycard away. For banks and employers, the free program is just a phone call or email away. Contact Jim McCarthy at 770.810.6502 or email jmccarthy@directo.net

Debit Card Skimmer

Recently I picked up a news video clip online from Yahoo News that illustrated how easy it was to steal debit card information using some slick technology. see video . The reporter does a great job reporting on the problem.

She also points to the problems with the recent hacking of RBS Worldpay's systems, whereby sophisticated scammers stole identification information and replicated customer's debit cards.

We all need to be careful about how and where we use our debit cards. The Directo paycard program instructions teach customers how to be careful. Our payroll card system processes and personnel protect customers at all time.

But you can never be too careful where you use any debit card.

- BH

It's Severe Weather Awareness Week - Is your payroll protected? Directo paycards can help.

The U.S. has had a bad winter this year. The entire state of Kentucky was icebound at the beginning of Georgia's Severe Weather Awareness Week, and frightening long-term power blackouts still affect many. For Georgia, the week is preparation for tornado season, March to May.

As a business person, what do you do if if one of your branches or locations is caught in a weather emergency?

With a Directo paycard program in place, paying your employees is easy, even if they are displaced. Direct deposit allows you to send your payroll file electronically to your bank, whether you're in your office, at home, or in a hotel room miles away. Your employees are paid on schedule, and may withdraw their funds from any ATM and make PIN-based purchases anywhere in the country.

Don't wait for the weatherman's warning. Make Directo paycards part of your business continuity plan plan today. See more at www.directocard.com.

Directo paycards cut spending, improve your bottom line - click below to view the presentation.

Payroll check fraud increases as economy worsens

On January 23rd a brazen thief was photographed leaving a Charlotte County, Florida, Wal-Mart after cashing a bogus payroll check. Here's the story from local radio station WINKnews.com:

CHARLOTTE COUNTY, Fla. - Charlotte County Sheriff's detectives are asking the public's help in identifying a suspect in a Wal-Mart surveillance photo in Murdock who cashed a $1,475 payroll check that turned out to be fraudulent. The incident happened Dec. 31, 2008 and the case remains unsolved.

Detectives said the suspect provided a payroll check made payable to a Timothy Lamar Trayhan of Palmetto, Florida, and he used a Charlotte, North Carolina, driver's license with photo to cash the check.

Detectives learned that the Wal-Mart on Cortez Rd. in Bradenton had also cashed six payroll checks from five different companies drawn on three different banks, and payable to six different people. All of the checks had the same routing and account numbers.

Those companies lost thousands of dollars, and may face even more losses if the criminals move to another town and cash more bad checks.

A quick way to cut payroll fraud risk is to implement a paycard program. Directo paycards make it easy to eliminate paper payroll checks, reducing fraud while streamlining payroll delivery.

Read more about payroll check fraud in an article Directo President and CEO Bob Howe wrote in Construction Magazine.

More people using Debit Cards for tax refunds

According to a recent article in the Washington Post:

"In the past, taxpayers anticipating a refund had three ways to get their hands on their money. They could wait six to eight weeks for a government check to arrive in the mail. They could have the refund automatically deposited in their bank account, which takes about two weeks. Or they could pay high interest fees for a so-called refund-anticipation loan and get their money immediately.

Now several tax-preparation firms are offering a fourth alternative -- plastic. "

For millions of people considered to be 'unbanked' in America, this is a viable option to receive their refunds quicker, safer and more economically.

Directo cards have long been used for this purpose. We encourage our customers, banking partners and payroll partners to encourage individuals to take advantage of this safe and speedy pipeline to their cash.

Not only is this a great idea, but should the government issue another stimulus check, those individuals with a Directo like card product may receive their funds quicker.

Heartland responds to the news of the widespread security breach

When we posted yesterday, Heartland had not issued a press release, and other than a brief statement from their president, no comment, either. Today, they have established a website that so far contains only their press release. If you can't follow the link, it's www.2008breach.com. Below the press release is a Questions and Answers link.

Check your bank statement!

The latest payment processing security breach underscores the importance of protecting your identity and staying alert to your account activity.

You probably know exactly when your direct deposit is due to hit your account, but do you know when electronic payments are scheduled? Now is the time to use online banking products that provide instant access to transaction activity. Fiscally responsible consumers keep close watch on their accounts to monitor activity and validate transactions. Directo provides 24/7 real time account information access, as well as monthly account statements. Keeping track of transactions makes you aware when anything unusual appears, allowing you to react quickly.

Protecting your identity

Keep your PIN secret, check your account often, and shred any documents that contain name, address, date of birth, and above all, social security number. While the growing sophistication of thieves means that there is no guarantee that you will always be safe from identity theft, precautions that you take, as well as your bank’s safeguards, will ensure that any attempt will be thwarted before it can do major harm. Keep safe!

Payday loan use growing among middle class families

As the country's economic news worsens, a natural side-effect of job losses and financial uncertainty is the increase in people looking for small loans to pay bills and handle emergency repairs. The Atlanta Journal-Constitution reprinted an article last week from the Los Angeles Times about the booming business of payday loans and its growing popularity with the middle class. Many families live without a financial cushion, and borrowing $300 for a $45 payday lender's fee seems reasonable when faced with having the lights or heat turned off in their homes.

Good money management
One of Directo's goals is to make every cardholder a savvy consumer. We email monthly newsletters full of money-saving tips to all of our clients to share with their employees, and counsel cardholders on the best ways to handle their accounts. An alternative for those looking for immediate access to extra funds for a short period of time is the ability to overdraw their accounts with overdraft protection for a much lower fee than a payday lender's.

Directo paycard accounts are portable, so it's not just the card their employer gave them at this job - it's an account for life. Directo paycard customers know that they don't have to carry all of their cash with them, that it's safe in their account, and soon discover that it's easier to save when their money is in the bank. And those savings might just keep them away from the payday lender.