Wednesday, August 28, 2013

A Clash Over Payroll Cards


Online Payroll Service
Just as they are getting to be more popular with employers and banks alike, payroll cards are attracting both legal and legislative scrutiny.

The New York Attorney General's Office is investigating complaints about fees and some U.S. senators are calling for increased regulation.

But this business line is booming and looks poised for more growth, in part because loading the cards is cheaper for employers than issuing paper checks.

In 2012, companies nationwide put $34 million on 4.6 million payroll cards, according to Aite Group. This will grow roughly 25 percent in 2013, to $42.8 million on 5.8 million cards, Aite estimates.

Based on a separate Federal Reserve study that pegs monthly fee income per card at about $1.75, the banking industry could generate more than $120 million in payroll card fees this year.

Despite the recent negative attention, Aite analyst Madeline Aufseeser says the future is bright for the cards. Besides the cost savings, businesses find the cards appealing because they view them as benefitting employees, particularly those who are temporary and part time. Money is immediately available on the cards on payday, typically free of charge for at least one withdrawal. So there is no waiting in line to cash a check at the bank and, for those without a bank account, no need to use a check casher. Also, if the card is lost, the value on it can be replaced.

But if the cardholder doesn't withdraw his or her full pay in one transaction, fees generally apply for subsequent uses of the card, either to make a purchase or an automated teller machine withdrawal.

The attorney general is looking into whether retailers and restaurants are running afoul of state laws that give employees a choice in whether to take a payroll card and a right to access their pay without a fee. Some have complained that they were forced to accept payroll cards despite having bank accounts, according to press reports. Others have reported incurring a variety of fees tallying as much as $50 a month.

Critics complain that some banks give employers a cash incentive for each employee who signs up for a card, but Aufseeser says that's not a common practice.

Many large banks offer payroll card programs, including Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Comerica, PNC and BB&T. Only Wells was willing to discuss the particulars of its program. The bank says it does not offer employers incentives for signing up employees. Payroll cardholders get free teller transactions at all Visa-participating banks and one free withdrawal at Wells' own ATMs. This complies with the New York law requiring that employees have free access to their pay.

Other large banks are joining the payroll bandwagon. KeyBank is scheduled to launch its Key2Payroll program in the first quarter of 2014, according to Key spokeswoman Laura Mimura. She says Key is getting into payroll cards because of demand from business customers.

Hundreds of smaller banks also offer payroll cards, many through a third party like TransCard in Chattanooga, Tenn., under the American Bankers Association Community Bank Prepaid Program.

Though none of the banks contacted for this story would discuss revenue, a 2012 analysis of payroll card usage by the Federal Reserve Bank of Philadelphia found that the median monthly revenue was $1.75 per card, versus $7.95 for general purpose reloadable prepaid cards. The analysis looked at 280 million transactions on 3 million cards issued by Meta Payment Systems, a unit of the $1.7 billion-asset MetaBank of Storm Lake, Iowa.

The study found that the average payroll card customer paid 55 cents per month in interchange fees, the most numerous of the fees collected. ATM withdrawal fees averaged $1.92 per month.

But most of the revenue that banks collect on payroll cards comes from the processing fees charged to employers, Aufseeser says.

Industry lawyers say bankers are not particularly concerned about the New York investigation. The crackdown is targeting employers, though the Attorney General's office has said it wants to review "any and all communications" with their payroll card provider or financial institution.

As a precaution, Terry Maher, general counsel for the Network Branded Prepaid Card Association, suggests that banks get proactive about making employers who use payroll cards aware of each state's laws. In the end, the bank is the issuer of the card, whether as a direct provider or through a third party.

"I don't think banks want to have the job of being the compliance officer to businesses," Maher says. "But it's important that they help their clients understand the regulations out there and help them with the appropriate disclosures."

Monday, August 26, 2013

Bloated Yankees' Payroll Could Doom Team For Years To Come


David Lariviere
David Lariviere, Contributor
I have been covering sports and business intensely for 30 years.

The resurgent New York Yankees have won 12 of their last 16 games to pull within 3 ½ games of Oakland for the second AL wild-card spot with 32 games to play. Just two weeks ago, it looked like the Yanks were done but the return of Alex Rodriguez, despite all the controversy, and Curtis Granderson from injuries and the power and clutch production of Alfonso Soriano have catapulted them back into the race.

It’s still a long shot that they’ll make the playoffs as they have the A’s, Indians and Orioles to pass. A 24-8 record (a .750 winning percentage) is probably required which would give them a 93-69 finish.

Yankee fans better enjoy this playoff push because next season could be the beginning of a decline reminiscent of the late ‘60’s and early ‘70’s. The reasons are obvious — aging, injury-prone players who have big contracts. The leader of the pack is A-Rod, who will make $26 million next year unless he is suspended by MLB for PED use in the Biogenesis scandal.

Mark Teixiera, who essentially missed all of this season and the last two months of 2012 with injuries, is due $23 million in 2014 as is former ace C.C. Sabathia, who has declined significantly this season experiencing a drop in fastball velocity. Ichiro Suzuki ($6.5 million), Soriano ($5 million), Derek Jeter ($3 million) and Vernon Wells ($2.4 million) are the others with guaranteed money coming. That totals $89 million, exactly $100 million shy of the $189 million luxury tax figure the team said it was committed to staying under next season. Because they are repeat offenders, the club pays a tax of 50 percent of every dollar over $189 million.

David Robertson and Brett Gardner are expected to combine for about $10 million in arbitration and the team will have to pay an estimated $11 million in benefits totaling $115.4 million for nine players on a roster of 25.

Then comes the issue of signing their two best players – Robinson Cano and Hiroki Kuroda – who are both free agents. Cano, 30, is expected to command between $20-25 million a year for eight years. Because of his importance, it’s hard to imagine the Yanks letting him go although the Dodgers may make a play for him. His agent, rapper Jay-Z, also could be problematic in terms of negotiations. Kuroda, who has been the Yanks’ best starting pitcher, figures to earn between $10-15 million annually. So that brings the payroll to around $150 million for 11 players with 14 still to sign.

It seems almost impossible that the Yanks could find room for free agent outfielder Granderson, who figures to receive between $10-15 million annually. That would leave $39 million for 14 players, or an average of about $2.8 million per player. They catch a break of sorts in shedding the $15 million salary of closer Mariano Rivera, who is retiring, but his loss will surely be felt on the field. Starter Andy Pettitte will likely retire as well.

Could the Yanks be on the verge of World Series droughts comparable to the ones between 1964 and 1976 and 1981 and 1996? Time will tell but it would behoove them to make one last playoff push with A-Rod, Rivera, Pettitte and Granderson on board.

Thursday, August 15, 2013

Three Reasons Why Values Matter, And I'm Not Talking The Money Kind


In fear of writing something redundant on my “PHD in CEO” blog, I searched for “company values.”  Nothing.

How about “culture and values”?  Nope.

How about “employee values”?  – “First Impressions Count: The Business Value for Dressing for Success.” 

Not really.

How about “corporate values”?  Eureka!  “Corporate Values” was a contender in the 2012 Jargon Madness bracket, which allows readers to determine a winner of the most “meaningless business jargon” of the year. “Corporate Values” topped “Make Hay” in the first round, but tragically lost to “Lots of Moving Parts” in the following round.  Though “Drinking the Kool-Aid” took the 2012 Jargon Madness Title, here is the tourney’s visceral description of “Corporate Values”:

“This expression is so suffused with phoniness it churns the stomach. Corporations don’t have values, the people who run them do.“

I know that Jargon Madness was whimsical (I hope), but in the spirit of making an argument on my blog, allow me to take issue with the tourney’s description of “corporate values.”  A company’s core values are not based on the “people who run them,” but are the very fabric of every person involved in the company – from executive team to brand new hire.  My beloved 1975 Philadelphia Flyers were the “Broad Street Bullies” not because Fred Shero was a tough-as-nails, spit-in-your eye Head Coach COH -0.11% (he was), but the entire team was filled with guys named “Moose,” “The Hammer,” “Machine Gun Kelly,” and a goaltender who loved to smell new shoe leather (Bernie Parent, look it up).  Company values are the antitheses of “phony ” and extremely powerful tools that are a necessity of any sized business.

Realizing that lists increase readership, here are my top three reasons why company values are critical to the long-term growth and value of your business:

1) Values are how you hire. It’s been said that when hiring, employers should trade 90 percent talent for just 10 percent character.  Hiring the person who best fits your team is vastly more important than the technical expertise that they may bring.  Your company values will determine if the person you are interviewing will be able to talk with your team, share with your team and not be a nuisance or an HR nightmare.  If “passion” and “accountability” are important to your company, ask each candidate how they are inspired by life and to describe a situation where they had to take ownership of a project from start to finish.

2) Values are how you change behavior.  At gap intelligence people are not late to work, instead they are not being “professional” – a strongly held gapCore Value.  By focusing on your values, rather than the isolated infraction at hand, it takes away any personal feelings that may be attributed to the corrective feedback. By replacing “Why are you late!?!?” with “Being late is unprofessional and professionalism is very important to us here.  What can you do tomorrow to fix this?” is vastly more effective in correcting behavior.

3. Values are the heart of your culture. By hiring based on values and holding each other accountable to the company’s standards, the values become the fabric of the organization’s culture – regardless of who is in charge. If you hire people who lie, cheat, and steal, in time your company culture will be the same.  If you want your company to be innovative, you’ll need a team of “smart,” “curious,” “problem solvers” on your staff. The best way to hire and keep smart, curious, problem solvers is to already have an office filled with like-minded people who share the same values.

“Corporate Values” are everything. “Drinking the Kool-Aid” is meaningless jargon.
gap intelligence’s gapCore Values:
  • Accountable: We own what we do.
  • Professional: A+ work. We carry ourselves with respect and maturity and work with knowledge and confidence every day.
  • Willing: Open to new ideas and challenges.
  • Passionate: Inspired by life.
  • Transparent: Be real. Be open. Be honest. We are building an environment of trust.
Gary’s Inspirational Hockey Quote of the Week (GIHQotW)
“And maybe I’m a little smarter now than I was before all the stupid things I’ve done.” – Herb Brooks

Gary Peterson
Gary Peterson, Contributor
I write about becoming a better CEO one goof at a time.

Wednesday, August 14, 2013

Man who created own credit card sues bank for not sticking to terms

 Andy Trotman

4:41PM BST 08 Aug 2013

When Dmitry Argarkov was sent a letter offering him a credit card, he found the rates not to his liking. 

But he didn't throw the contract away or shred it. Instead, the 42-year-old from Voronezh, Russia, scanned it into his computer, altered the terms and sent it back to Tinkoff Credit Systems.
A selection of credit cards in a fan.Mr Argarkov's version of the contract contained a 0pc interest rate, no fees and no credit limit. Every time the bank failed to comply with the rules, he would fine them 3m rubles (£58,716). If Tinkoff tried to cancel the contract, it would have to pay him 6m rubles.
Tinkoff apparently failed to read the amendments, signed the contract and sent Mr Argakov a credit card.
"The Bank confirmed its agreement to the client's terms and sent him a credit card and a copy of the approved application form," his lawyer Dmitry Mikhalevich told Kommersant. "The opened credit line was unlimited. He could afford to buy an island somewhere in Malaysia, and the bank would have to pay for it by law."
However, Tinkoff attempted to close the account due to overdue payments. It sued Mr Argakov for 45,000 rubles for fees and charges that were not in his altered version of the contract.

Earlier this week a Russian judge ruled in Mr Argakov's favour. Tinkoff had signed the contract and was legally bound to it. Mr Argakov was only ordered to pay an outstanding balance of 19,000 rubles (£371).

"They signed the documents without looking. They said what usually their borrowers say in court: 'We have not read it',” said Mr Mikhalevich.

But now Mr Argakov has taken matters one step further. He is suing Tinkoff for 24m rubles for not honouring the contract and breaking the agreement.

Tinkoff has launched its own legal action, accusing Mr Argakov of fraud.

Oleg Tinkov, founder of the bank, tweeted: "Our lawyers think he is going to get not 24m, but really 4 years in prison for fraud. Now it's a matter of principle for @tcsbanktwitter."

The court will review Mr Argakov's case next month.

Tuesday, August 13, 2013

Beware of Fees on Payroll Cards

Beware of Fees on Payroll Cards

<a href="">online payroll service</a>
Do you get your paycheck through a payroll prepaid debit card? If so, you may be losing more money than you realize.

Payroll cards are designed to give workers faster access to their money than paper checks, but most employees don't know about the excessive fees associated with these cards. Before you opt out of paper checks or bank deposits, you need to learn more about your payroll card. It could be costing you a small fortune.

According to the research firm Aite Group, an estimated $34 billion was loaded onto 4.6 million active payroll cards last year.

The largest issuer of payroll debit cards is NetSpend, a company that charges up to 18 different fees on a number of its cards. These fees represent everything from loading fees to to charges for inactivity, meaning that you did not use your card as often as they want. NetSpend isn't the only company guilty of charging these fees. Most prepaid issuers have various fees in place so they can make as much money as possible. Meanwhile, your paycheck gets smaller and smaller.

Recent surveys indicate that some workers are spending close to $30 a month on payroll card fees, despite a drop in the fees to make cards more competitive. That means they could be wasting nearly $400 a year from using a payroll card.

Analyze the fees associated with your payroll card to see if it is really worth the convenience. If not, learn to wait patiently for a check in the mail.

About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at


Payroll Builder is an online payroll service, which makes it simple to use and easy to access. To employers who have workers out on work sites, with a single purchase you can have your employees clock in from their phones and you will be alerted to where exactly they where when they clocked in. We want to provide great payroll service the Natural State, and are ready to serve you in Fort Smith, Little Rock, Russellville, Fayetteville, and everywhere else in Arkansas and the U.S. Visit our payroll site for more information!

Thursday, August 8, 2013

Cash-Strapped Chinese Turn to the Internet to Borrow Money

VOA News

Chinese yuan (file photo)

Payroll Builder is an online payroll service, which makes it simple to use and easy to access. To employers who have workers out on work sites, with a single purchase you can have your employees clock in from their phones and you will be alerted to where exactly they where when they clocked in. We want to provide great payroll service the Natural State, and are ready to serve you in Fort Smith, Little Rock, Russellville, Fayetteville, and everywhere else in Arkansas and the U.S. Visit our payroll site for more information!

Monday, August 5, 2013

5 Ways To Attract Money

Karsten Strauss
Karsten Strauss, Forbes Staff
A journalist covering entrepreneurs, technology & business.

You’re a young company with an interesting product in development. You’ve watched a few startups rise to glory, watched others crash and burn. Undeterred, you’re sure you can make. All you need is a bit of cash to get on a growth track and inch closer to profitability and success.
But how do you go out and get that growth capital?

You could bootstrap it by cutting your expenditures down to almost zero, living on dehydrated noodles and doing laundry at mom’s place, but that will only go so far. There’s always crowdfunding, but to get any attention doing that you need a seriously unique or wacky idea like or a shake that replaces food or a film about Nazis living on the moon.

There’s always a bank loan, but even if you can get it that’s just money with interest attached and it would be great to get cash plus contacts and guidance. Venture capital is always an option.

“I see a healthy venture capital market for startups,” said Charles River Ventures’ George Zachary, who led his firm’s investment in Yammer (acquired by Microsoft MSFT -0.14% for $1.2 bln. last year). “I don’t see any shortage in venture investors wanting to fund startups.”

Maybe venture capital or angel funding is the way to go. But how do you make the bigwigs at a venture capital firm deign to cut you a check?

Here are some tips that may help you fund your enterprise:

1 – Disrupt Something
Getting in between an established competitor and its cash cow is tough, but lucrative when you can pull it off. Disruptive products and technology can help your company eat the lunch of the bigger players in your space and if you can convince an investor that your business model can accomplish that – even a little bit – that investor will see the rewards and be more willing to help you grow your idea.

“We’re looking for truly non-linear companies that disrupt large B-to-C and B-to-B markets,” says Jason D. Whitmire, a partner with Earlybird Venture Capital. “Usually these teams have to have a very strong (tech) DNA. That means technology at their heart. Ideally they’re all very techy people. Increasingly, I think, businesses that build engagement or networks leading to a high degree of defensibility are extremely attractive.”

2 – Have A Touch Of Experience
It’s not necessarily expected for startups to be filled with battle-hardened business veterans, but having a couple on your team that have seen a funding round or two at other young companies definitely doesn’t hurt.  Venture capital firms feel better if they know they’re not handing a wad of money to a roster of newbies. 

“Guys and gals in the 20s produce some phenomenal stuff but typically we’ve seen that out hold periods – the lengths that a venture capital company sits on an investment – are dramatically shortened with one or two people who have played the game before,” Whitmire said.

Zachary agrees: “These people know that this is not necessarily going to be easy all of the time and to expect the need to continuously stay focused on the reality of the business, on the day-to-day metrics and realizing that there’s usually a winner that takes all and wins most of the valuation in a market space and that being number two or three is really not a great place to be.”

3 – Be Efficient, If Not Profitable
Profitability is milestone you won’t forget and a major sign that your young company is on the right track. But it is not necessary to attract venture money or angel interest. In fact, most investors would not even expect you to be profitable if you operate in certain spaces.

You may be losing money but remember that how you deal with the money you are making can show how cost conscientious and efficient you are. Those spending tendencies and professionalism will send a message to those contemplating an investment in your startup. Growth is paramount and having a burn rate of below $200K per month for a company of 12 emplooyees or less is compelling. “That’s gonna be the sweet spot,” 

Whitmire said. “Once we’ve figured out how the engine works – figured out what the return is for every marketing and sales dollar spent – that’s where you can pump it up and go a half million burn a month. As long you’re truly growing.”

Read Page 2 Here
Payroll Builder is an online payroll service, which makes it simple to use and easy to access. To employers who have workers out on work sites, with a single purchase you can have your employees clock in from their phones and you will be alerted to where exactly they where when they clocked in. We want to provide great payroll service the Natural State, and are ready to serve you in Fort Smith, Little Rock, Russellville, Fayetteville, and everywhere else in Arkansas and the U.S. Visit our payroll site for more information!