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.

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):
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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.
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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

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.

Does your paycard support electronic bill pay?

Prepaid Trends had a guest column November 6th on electronic bill pay, a feature gaining popularity with the internet savvy customer. Directo debit card holders have had this feature from the beginning, since 1998. Each Directo account is individually owned, and bill pay and auto debit are just some of features our customers enjoy.

The author of the Prepaid Trends article mentioned Payvox, a product that allows electronic bill pay via telephone. I've also seen small businesses, especially in Hispanic commercial areas, that offer billpay at computer terminals that the customer uses, with personal assistance for those who may not know how to operate them. Many public libraries offer their patrons computers with free internet access, and as long as the personal information is erased after using to keep information private, this is a good, free alternative.

Electronic bill pay is convenient, and for Directo paycard customers, free. The cost of postage, money orders and the time and hassle of organizing the payments are erased by learning how to manage a few keystrokes.

Directo's ease of paying bills online and scheduling electronic debits also erases the line between those who are banked and unbanked, as many who can have "brick and mortar" accounts choose the Directocash debit card because of its low cost, ease of use, and range of benefits.