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Paperless Payday: Some Employers Offer Prepaid Payroll Cards

Aired February 13, 2004 - 06:15   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CATHERINE CALLAWAY, CNN ANCHOR: It's time now this morning for a little "Business Buzz." Forget about your direct deposit, your paycheck may soon come on a debit card.
Let's go to Carrie Lee who has the story from the Nasdaq market site in Times Square.

Good morning to you.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Good morning to you, Catherine.

This is something that more and more employers are doing, offering people's paychecks or bonuses on a prepaid or stored value card. It looks like a credit card, and you can basically use it in a lot of retail locations. You don't have to deal with taking your paper paycheck, depositing it and waiting for the money to clear.

The idea here, it's convenient for workers. It can save employers quite a bit of money. U-Haul, for example, who has been doing this for about two-and-a-half years, that company estimates it saves about half a million dollars a year as it moves away from paper paychecks.

Now true, this idea isn't for everyone and a lot of people simply have direct deposit. The idea here is that this is a good idea for students, for part time workers or for low-income workers. One estimate says that about 12.4 percent of people should have payroll cards within this category by 2004. "The Wall Street Journal" illustrates this very nicely in its paper today talking about this trend.

And one thing people do need to be careful about, though, are fees. If you use the card at an ATM or other location, there can be some fees involved. Of course check cashing has some fees as well, but for some people, Catherine, a pretty convenient idea. And if you do lose the card, your employer can cancel it and offer you a new one. So there's a safety factor built into this idea as well.

Back to you.

CALLAWAY: You know those fees get me. Sometimes they are like two or three bucks.

What about futures this morning -- Carrie?

LEE: Looking pretty strong. Looks like we could see a rebound from the slight losses we saw yesterday. All of the major market indices losing a bit of ground. As you can see, the Dow down 43 points.

Dell reporting profits that beat the Wall Street expectation last night after the close. Sales met the Street estimate, higher than the year-ago period. And Dell is also giving some optimism that demand for technology equipment is increasing. So that's certainly part of the reason futures are pointing to a higher open this Friday -- Catherine.

CALLAWAY: All right. Good morning to you, Carrie, thank you very much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





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Aired February 13, 2004 - 06:15   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: It's time now this morning for a little "Business Buzz." Forget about your direct deposit, your paycheck may soon come on a debit card.
Let's go to Carrie Lee who has the story from the Nasdaq market site in Times Square.

Good morning to you.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Good morning to you, Catherine.

This is something that more and more employers are doing, offering people's paychecks or bonuses on a prepaid or stored value card. It looks like a credit card, and you can basically use it in a lot of retail locations. You don't have to deal with taking your paper paycheck, depositing it and waiting for the money to clear.

The idea here, it's convenient for workers. It can save employers quite a bit of money. U-Haul, for example, who has been doing this for about two-and-a-half years, that company estimates it saves about half a million dollars a year as it moves away from paper paychecks.

Now true, this idea isn't for everyone and a lot of people simply have direct deposit. The idea here is that this is a good idea for students, for part time workers or for low-income workers. One estimate says that about 12.4 percent of people should have payroll cards within this category by 2004. "The Wall Street Journal" illustrates this very nicely in its paper today talking about this trend.

And one thing people do need to be careful about, though, are fees. If you use the card at an ATM or other location, there can be some fees involved. Of course check cashing has some fees as well, but for some people, Catherine, a pretty convenient idea. And if you do lose the card, your employer can cancel it and offer you a new one. So there's a safety factor built into this idea as well.

Back to you.

CALLAWAY: You know those fees get me. Sometimes they are like two or three bucks.

What about futures this morning -- Carrie?

LEE: Looking pretty strong. Looks like we could see a rebound from the slight losses we saw yesterday. All of the major market indices losing a bit of ground. As you can see, the Dow down 43 points.

Dell reporting profits that beat the Wall Street expectation last night after the close. Sales met the Street estimate, higher than the year-ago period. And Dell is also giving some optimism that demand for technology equipment is increasing. So that's certainly part of the reason futures are pointing to a higher open this Friday -- Catherine.

CALLAWAY: All right. Good morning to you, Carrie, thank you very much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





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