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

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/

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

Debit use is up, and paycards are seen as an answer to high interest credit cards

As belts tighten across the U.S., people are turning away from high interest credit cards and are instead using debit, and some are buying prepaid cards. According to a Business Week article on msn.com, consumers are using the cards as a “budgeting tool to limit spending” or splitting the direct deposit with committed funds going to one account and the paycard receiving discretionary money.

More people use the internet to pay bills and make purchases and the subsequent decline in use means that electronic banking becomes more accepted. Some are also ditching their traditional bank accounts, choosing instead to deposit their payroll into paycards rather than other types of money management tools, such as traditional checking accounts. At Directo we've seen an increase in the number of accounts opened by customers who have other financial options. Directo accounts are checkless checking accounts, and can be used for payroll, bill pay and to receive payments such as social security benefits and tax refunds. Funds are held in an FDIC-member bank, which adds to the security of Directo accounts.

Today as never before, consumers are 'kicking the tires' before committing to financial services. Directo's proven stability and ten years of paycard experience gives our customers the assurance they need.