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
Showing posts with label payroll card. Show all posts
Showing posts with label payroll card. Show all posts
Wednesday, April 1, 2009
Tuesday, March 31, 2009
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!
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!
Monday, March 30, 2009
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.
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.
Tuesday, March 24, 2009
Cash Advance Loans vs Saving for Emergencies --- a no-brainer
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!
Monday, March 9, 2009
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
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
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