Wal-Mart Stores is looking to reduce expenses associated with payroll checks by paying employees who don't use direct deposit with a debit card. About half of the company's workers currently receive their pay on paper checks.
According to a Wall Street Journal article, Wal-Mart believes it can save over 257,000 pounds of paper associated with check usage. Government agencies are using debit cards to deliver payments to Social Security recipients and others.
While the use of debit cards is expected to save Wal-Mart money, there have been concerns raised that workers will be charged fees to use the cards. MasterCard is working with Wal-Mart Stores and has promised to offer low fees, including the first ATM transaction per pay period being free. Using the card after that will be billed at $2 a transaction. Employees will not be charged fees for withdrawing cash by using their cards at Wal-Mart registers.
Laura Kelly, senior vice president of global prepaid cards at MasterCard, told the Journal that employees will benefit simply by not having "to go to stores to pick up their paychecks anymore."
Discussion Questions: What do you think of Wal-Mart Stores switching to debit cards to pay workers? Will this become a widespread practice in retailing and related businesses in the years ahead?