NationsBank Introduces CashPay ATM Card for Employees without Bank Accounts

Strategic Insights -

NationsBank is expanding financial inclusion options for employees without traditional bank accounts by introducing the CashPay ATM card. Rolled out on July 1, this new product allows employees of participating companies to use their ATM card to withdraw their paychecks at a convenient location. The bank charges a $1.50 fee for each transaction, with employers having the option to absorb the cost or pass it on to their employees. First Union National Bank has offered a similar product, called PayAccess, for nearly two years, but with some key differences.

Key Takeaways:

  • The CashPay ATM card is a product for businesses, not consumers, targeting companies that have employees without bank accounts.
  • The card can only be used by employees of participating companies, and the employer has control over the account.
  • Employers can opt to absorb the $1.50 transaction fee or have their employees pay it.
  • First Union's PayAccess product does not charge a service fee to users when they withdraw their paychecks from a First Union ATM.
  • NationsBank charges a set-up fee and a maintenance fee for employers, which can open a special account for their employees.
  • The special accounts are limited, allowing only paychecks to be deposited and no checks to be written.
  • Users face additional charges if they use ATMs from other banks.
  • Check-cashing businesses in Jacksonville typically charge $9 to cash a $300 payroll check.

Statistics:

  • The CashPay ATM card was rolled out on July 1 by NationsBank.
  • First Union's PayAccess product has been available for nearly two years.
  • The cost of delivering money via an ATM transaction ranges from 27 cents to 70 cents, depending on the expert and the costs included.
  • PayAccess has been a successful product for First Union, with Allison Rash noting its positive impact on business.

Sources:

  • NationsBank spokeswoman Julie Turner Davis: "This is a product for businesses, not for consumers."
  • First Union spokeswoman Allison Rash: "PayAccess has been very successful."
  • SunTrust Banks spokeswoman Carolyn Gosselin: "SunTrust will work out payroll-cashing agreements with employers at no cost to the employer or employee."
  • SouthTrust Bank spokeswoman Brenda Wimberly: "SouthTrust Bank does not charge non-account holders for cashing paychecks drawn on the bank."
  • Compass Bank spokeswoman Ellen Laden: "We cash checks as a courtesy."