Magazine article American Banker

Chemical Speeds Paycheck Cashing

Magazine article American Banker

Chemical Speeds Paycheck Cashing

Article excerpt

Chemical Banking Corp. has found that a recently introduced electronic paycheck-cashing service has helped control operating costs and shorten teller lines.

Since it began marketing the program last spring, Chemical officials said, it has issued about 4,000 "Ready Pay" cards to employees of some 180 corporations in the New York area. The cardholders, who need not have their own Chemical accounts, represent about a quarter of the participating corporations' employees.

The Ready Pay program is aimed at increasing the number of companies that deposit paycheck electronically.

Controlling the Lines

Chemical is pushing direct deposit because it cuts down on long lines of customers who want to cash their paychecks.

Ready Pay is an ATM card that replaces a check-cashing card, and can only be used to withdraw cash from a payroll account. It resembles the Chemical bank card, except that it has a red stripe instead of a blue one. It can be used on the NYCE, MAC, or Cirrus networks.

Cynthia Read, vice president and business director of Chemical's unit in charge of the program, said many companies complained that direct-deposit programs did not bring them significant cost savings.

Ms. Read said that was because the companies need to sign up about 75% of their employees for direct deposit before they can benefit from streamlined payroll operations.

The purpose of Ready Pay is to move employees who do not have bank accounts to an electronic payment method. Ms. Read said Ready Pay seemed to have helped corporations increase the number of employees receiving electronic payments. …

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