Growing number of employees paid with cards

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Growing number of employees paid with cards

NEW YORK, US - An increasing number of employers in the US are replacing traditional methods of payment for employees with a new type of payroll card system which provides workers with instant access to cash through ATM machines, rather than having to wait to cash a cheque.

Employees can now opt to get cards that are credited with their wages each pay period, with major employers using the scheme already including Sears, McDonald's, Blockbuster and Domino's use payroll cards.

Over the next year, it is estimated that around 50 per cent of employers plan to evaluate the benefits of payroll cards for their companies, according to a survey by the American Payroll Association.

However, despite the predicted rapid take-up of the method, some critics have warned the cards are bad for employee, due to fees that may be charged for accessing the cash, while others have claimed the cards don't give users the chance to save as they might with a bank account.

"We see payroll cards contributing to a second-class system of consumers," Ed Mierzwinski at consumer advocacy group U.S. Public Interest Research Group, told USA Today.

"The companies are just trying to save money. Companies ought to leverage their power to force banks to offer affordable accounts."

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