Stored Value Cards for Payroll

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Question:

We are looking at offering a stored value card that will allow our business customers to direct deposit payroll to this card, in a master account, rather than issuing a check or direct depositing to an individual's account. The business issues the card to the employee and they use the card just like a debit card. What disclosures are needed for this product and would these be issued to the business only, since they are our customer, or would it need to be issued to the business and each employee that receives a card?

Answer:

There is an OCC publication, an Analysis of Payroll Cards that you will find addresses some compliance issues. It is a well rounded publication on this product and is a must read for any bank thinking of introducing this product.

First published on BankersOnline.com 04/5/04