Magazine article American Banker

Global Pay, Dominican Agency Have Payroll Pact

Magazine article American Banker

Global Pay, Dominican Agency Have Payroll Pact

Article excerpt

Global Pay Solutions Inc., a San Diego seller of prepaid cards, has signed a contract to provide a card-based payroll system for up to 70,000 municipal workers in the Dominican Republic.

The company announced the deal Tuesday with the Liga Municipal Dominica, the government body that manages the country's budgeting and payments.

The agency will pay Global Pay $400,000 up front for the cards. The company also expects to earn about $3 per card, per month, in tranasction processing fees, or about $2.5 million per year.

The cards can be used to make withdrawals from automated teller machines.

Global Pay's Dominican Republic division, GPSI Dominicana, will manage the payroll system.

David Kowal, Global Pay's president, said that the agency's current paycheck system is more expensive and less efficient than payroll cards, in large part because of the country's inadequate postal system.

"In the Dominican Republic, every mayor and governor has to drive to the capital and physically pick up the payroll," he said.

Switching to card-based payments is easy in developing countries, Mr. Kowal said, because the necessary infrastructure is in place now. Point of sale terminals and ATMs are common because of their ease of deployment, even though many people do not have traditional banking relationships, he said.

The cards are expected to be deployed in 60 to 90 days, Mr. Kowal said.

Sixteen other countries, including Mexico, El Salvador, Guatemala, Colombia, and Honduras, are interested in using Global Pay's cards or planning to do so, Mr. …

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