We’ve all received paychecks. How about a pay…card? The drugstore giant Rite Aid announced that it will offer its 91,000 employees the chance to receive their paychecks on prepaid debit cards.
“We think it’s good for our associates because we promote direct deposit,” Karen Rugen, the company’s lead spokeswoman, said in a phone interview. “And secondly, we have a lot of associates who don’t have a bank account, and this works as a debit card for them, and they can avoid check cashing fees.”
Prepaid debit cards are often targeted to people who don’t have bank accounts. The cards enable them to make online purchases, and in some cases come with paper or online statements that let them track their spending.
Corporate employees will get first crack at the cards in June. Workers in the company’s stores will get them in July, Rugen said. Employees can use the cards at Rite Aid stores, and take out cash for free using a network of 37,000 ATMs. Neither Rite Aid nor its employees will pay for the cards.
The cards will be printed and managed by Green Dot, a California-based prepaid debit card company. We asked Green Dot how it plans to make money from the system, but Liz Brady, a spokeswoman for the company, declined to comment.
[Credit Card Q&A: Building a Credit History Using a Prepaid Debit Card]
Image: Courtney Carmody, via Flickr.com
Christopher Maag Contributing writer for Credit.com, Chris graduated with honors from the Columbia University Graduate School of Journalism, and has reported for a number of publications including The New York Times, TIME magazine and Popular Mechanics. Reach Chris via email at chris@credit.com.
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Why use the old way to distribute payroll when it can be done electronically? There are a few different pay card sites out there which can help making distributing paychecks much easier especially for start-up companies.
Okay… my spouse is experiencing this right now thru a different company. How about having to pay fees to access your paycheck? How about not being able to withdraw your entire pay check because of limits on your card? This may be nice for some folks without a checking acct for direct deposit but, in truth $3 at Walmart is better than $17 in access fees to the same bank issuing the card in the first place. Warning to employers be careful for your employees sake.