Posts Tagged ‘Prepaid’

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Direct Deposit Cards – Alternative to Check Cashing Fees

Wednesday, September 23rd, 2009

Check cashing fees are outrageous for someone that does not have a bank account. A better alternative than cashing checks at a check cashing store is a direct deposit card . With a direct deposit card, a person can get access to their money as fast or faster than cashing a check. Direct deposits are not just for people that have bank accounts, but can be available to anyone with a Direct Deposit card. Direct deposit cards can be used to deposit paycheck, Government benefits checks, and tax refund checks.

Direct Deposit Without a Bank Account. Even if you do not have a bank account, you can get direct deposit with a direct deposit card. These direct deposit cards are available with no credit application and no bank account required. Many of these cards have the Visa or Mastercard logo and can be used in stores or online just like a regular credit card. Also, you can withdrawal cash from your local ATM machine using these prepaid credit or ATM cards.

Direct Deposit and Direct Deposit Cards. Direct Deposit is a safe, proven, confidential method of receiving payments. Money is electronically transferred from a company or organization into your checking, savings or direct deposit card account. A direct deposit card is much like a bank debit card, but with no checkbook. You can access your money at an ATM machine in the same manner as a bank debit card.

Benefits of a Direct Deposit Card.Direct Deposit Card Benefits include:

  • Safe & Confidential. Direct Deposits do not get “lost”. A check passes through more hands than an electronic transfer. Problems are rare, but quickly resolved.

  • Convenient. No waiting in lines to cash checks with a direct deposit card. You do not need to be in town to get paid.
  • Fast. You do not need to wait 1 to 4 days for a check to clear. Tax refunds can be deposited on to a direct deposit card in days vs. weeks by mail.
  • Better Manage Finances. You can divide your pay between accounts – savings, checking, direct deposit card.

Direct Deposit Cards – Not Just For Paychecks. A direct deposit card is not just for paychecks, but also for benefit payments. Employers, Government, and Companies can use it for annuities, bonuses, commissions, dividends, pensions, travel expenses, vendor payments and income tax refunds.

Are you still cashing pay checks?

Outrageous Check Cashing Fees. In most cases, this ties up your money waiting for checks to clear and wastes your time waiting in lines. Worst, this is costing you money if you are being charged a check cashing fee. A two-paycheck family can easily be charged over $1000 in check cashing fees a year.

Most Employers Offer Direct Deposit – Ask. Often times employers are unaware that employees are interested in direct deposit. Ask your employer. If you hold a direct deposit card, you can have your pay or a portion of your pay direct deposited into your prepaid debit card account.


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International Money Transfer Options

Tuesday, September 22nd, 2009

It costs a lot to do an International money transfer. Even with the high cost of International money transfer, money sent back to relatives is the largest source of foreign investment for many African and Latin American countries. Traditionally, people have used a money transfer agent such as Western Union or used a bank wire transfer to send money to relatives and families. With the advent of the internet and prepaid debit cards, there are now more choices when sending money overseas.




Choices for International Money Transfer

There are now many choices for International money transfer. These choices include cash transfers, money orders, bank transfers, prepaid debit / ATM cards, eWallets, or credit cards. See below for the advantages and disadvantages of these different types of International money transfer methods.

Cash Transfers

Cash transfers using a money transfer agent is a convenient, but expensive method to transfer money overseas. Western Union and MoneyGram are examples of money transfer agents. With a money transfer agent the sender gives the cash to be sent to the local money transfer agent, and the receiver then can collect the cash at a local money transfer agent. Both Western Union and MoneyGram will also accept payment online or by phone to transfer money overseas.

International Money Orders.

International money orders are cheap, but they have to be mailed to the recipient. If you use an United States Postal Service (USPS) money order, it can be cashed in most banks or post offices in foreign countries. Banks and financial institutions also offer money orders, but money orders other than the USPS may be difficult to cash.

Bank Transfers

Bank transfers are convenient and secure if at least the receiver has a bank account. The sender does not have to have a bank account as most banks will accept cash from a non-bank customer for a bank transfer (fees will be higher for a non-bank customer). Many banks offer banking accounts that cater to multi-currency transactions at a very competitive rate. Most banks provide various International money transfers options such as wire transfers, currency exchange, money orders, bank drafts, and even ACH services.

Transfer Money To A Prepaid Debit / ATM Card.

A prepaid debit card is a great way to avoid high International money transfers fees. Great for family members where money is transferred on a regular basis. You can either send the recipient an ATM card containing the money or transfer money to a re-loadable ATM card that the recipient carries with them. You can send money to the debit card from your bank account, eCurrency, credit card, or another prepaid debit card. Many ATM cards now carry the Visa or Mastercard logo which means that they can be used at ATM machines or be used for shopping instead of converting the money to cash.

Transfer Money Using an eWallets.

eWallets can be a cheap, secure way to transfer money if both the sender and receiver have access to online accounts. An example of an eWallet is PayPal that specializes in person-to-person payments online. There are also several International companies that fulfill the need for a global currency by offering private eCurrency backed by gold. By using the gold standard there is no need to convert currency. Money transfers between eCurrency accounts can happen in seconds. In most cases you can open up an eCurrency account for free. Depending on the financial services company, there are many ways to add eCurrency to your account and to transfer the eCurrency to your local financial institution and local currency.

Transfer Money Using Credit Cards.

Credit cards can be a convenient way to transfer money between a parent and a student studying overseas. Credit cards can also be a way to readily receive cash by using the cash advance feature on most credit cards. You can also have multiple cards issued to family members tied to the same account. Then for example, a parent’s college student needs money he would just use a cash advance at an ATM to get cash. The downside to cash advances on credit cards is that there are many times additional fees and higher interest rates tied to a cash advance vs. just regular credit card purchases.


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Mobile Phone Banking Defined

Monday, September 21st, 2009

Mobile phone banking is a financial service where you can conduct common banking transactions using your cellular phone. Mobile phone banking has not really caught on in countries where there is a mature banking infrastructure and where most people have bank accounts. Mobile phone banking has caught on in less developed countries as a viable method to make micro-payments, pay for cell phone usage, and to send money to another person.

The Beginnings of Mobile Phone Banking. Mobile phone banking started with the advent of the prepaid cellular phone. With any prepaid cellular phone, cell phone companies also provide an user account that is decremented every time the cell phone user uses the phone. As prepaid cell phone services matured users began to use their prepaid accounts to buy other things such as ring-tones and other cell phone services. In some countries, cell phone companies started offering their customers other services such as transferring cell phone minutes to other accounts or even “money” to other cell accounts.

Mobile Phone Banking – Stored Value. Mobile phone banking can be conducted using existing bank accounts or using stored value accounts. A stored value account is an account where a retailer or financial institution maintains a financial account for a customer. This financial account does not allow the user to write checks against it, but these stored value accounts can get very sophisticated where they can have many of the characteristics of a bank account. In mobile phone banking, it is usually the cell phone provider that provides their users with a stored value account versus the user using their own bank account, if they have one.

Mobile Phone Banking – Bank Accounts. Most traditional banks do not provide full-service mobile phone banking. Many banks let their customers view online account balances. Some are even allowing their customers to make payments using their cell phone. Eventually, banks will provide mobile phone banking much like most banks provide online banking services today. Most traditional bank customers do not think mobile phone banking is a high priority. As cell phones become more web browser-based, I would expect that most bank customers will access their banks through the internet browser in their cell phone. Another reason banks have not embraced mobile phone banking is because of security concerns and interoperability. It is expected that security and interoperability will be less of a concern as mobile phone banking matures.

Benefits of Mobile Phone Banking. The biggest benefit of mobile phone banking is for persons that do not have a bank account. Especially in developing worlds, many people do not have a bank account. Mobile phone banking has many benefits for the “unbanked”. This includes:

  • Paying bills to utility companies.
  • Receiving payments from individuals and employers (use retail agents to receive cash).
  • Sending payments to individuals and family members, domestic and International.
  • Make micro-payments to participating merchants instead of using cash.

See O’Reilly’ Radar’s article, Mobile Banks in the Developing World Prove Simpler is Better, for more information on mobile banking and mobile banks. Other mobile banking postings include: PayPal Mobile, Pay For Products With Your Cell Phones.

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