In an editorial about proposed state regulations, The New York Times perpetuates myths about payroll cards while advocating for overreaching regulations that could hurt some of the state’s most vulnerable workers.
The problem is that the cards, used mostly by low-wage employers, are often laden with fees that take a big bite out of worker pay through A.T.M. fees on withdrawals, transfers and account-balance inquiries, replacement fees for lost cards, inactivity fees for infrequently used cards and fees imposed by retailers for use of the cards.
The article is loaded with inaccuracies that ignore the realities of payroll cards. Retailers do not charge fees for using payroll cards. They look like any other debit or credit card and don’t incur fees at the point of sale. Payroll cards offer at least one free ATM withdrawal per period and are connected to surcharge -free networks, so payroll card users face no more ATM fees on withdrawals than any other type of cardholder. Inactivity fees are not charged on payroll cards either.
Most employers who use payroll cards want cards that will provide their employers with a good way to access their wages. Employers do not make any money from payroll cards, and so they demand that the features and functions provided to their workers are useful and fairly priced.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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