Walmart, our nation’s largest employer, has eliminated paper paychecks. Now employees can choose to sign up for direct deposit or have their wages added to a pre-paid debit card. ABCNews says that only about half of Walmart’s employees use direct deposit — the rest either prefer a paper paycheck or, in some cases, don’t have a bank account.
Wal-Mart employees will be able to use the cards anywhere that accepts MasterCard and also be able to get cash from ATMs.
There would be no fee from Wal-Mart or MasterCard – who is providing the cards – for the first ATM withdrawal in a pay period. (Banks could charge their own fees for using their ATMs.) After that first withdrawal, each additional one would be $2. Employees can also purchase something at Wal-Mart or Sam’s club stores and get cash-back above their purchase without any fees. Workers can also get checks to pay people who don’t accept debit cards.
The use of company controlled debit cards brings up some interesting privacy issues as well. Debit cards leave a paper trail — do you really want your employer to know how you spend your money? Walmart says they don’t have access to that data:
“Wal-Mart’s Moore said that would not be the case, saying that the program is “administered by MasterCard and First Data and we won’t have the ability to see that information.”
The upside for some employees — those without a checking account who were relying on check cashing services — is that it may actually save them money. Either way, it will certainly be cheaper for Walmart. The switch to debit cards will save 257,572 pounds of paper a year.
Wal-Mart to Pay Via Check Cards [WSJ]
Wal-Mart to Staff: Bye-Bye Paycheck, Hello Debit Card [ABCNews]