News

Bank directing customers to ATMs with payroll cards

July 23, 2002

ST. LOUIS -- St. Louis-based First Banks Inc. is sending more customers to the ATM lines as it expects to distribute nearly 500,000 new MasterCard Payroll cards by the end of 2003.

Workers without a bank account can receive their wages on the cards, which are accepted at retailers and MasterCard, Maestro and Cirrus ATMs, according to the St. Louis Business Journal.First Banks operates in Missouri, Illinois, California and Texas.

Citibank, J.P. Morgan Chase, KeyBank, Comdata Corp., Comerica, Bankfirst and ABN AMRO Group will also offer the MasterCard payroll cards, according to the paper.

The cards can cut check handling, distribution, fraud and replacement costs for employers, said Jeffrey Ungerott, First Banks' senior vice president. In the initial stages, payroll cards will be issued in southern California, targeted to replace 150,000 ATM debit cards for migrant workers. Mainstream retailers also are interested, Ungerott said, but he declined to name them.

Employers pay a set-up fee that varies depending on the size of the program they use, but would be several thousands of dollars, Ungerott said. Card users will be charged around $3 per transaction.

Chicago-based retailer Sears Roebuck & Co. currently uses the cards, issued by Comdata. Little Caesar's Pizza also uses the program, according to MasterCard. MasterCard's research indicated there are 15 million U.S. households without banking relationships, said Steve Harrison, MasterCard's vice president of customer solutions.