Better Business Bureau Launches Pay Card So Its Members Can Stop Issuing Checks

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The Nashville Better Business Bureau launched its TrustCard MasterCard prepaid payroll card for Better Business Bureau-accredited businesses on Oct. 30 to give them an alternative to checks.
The phrase "Exclusively for BBB Accredited Businesses" will appear on the card, and the bureau is offering it only to member businesses, says Ted Dargan, MasterCard WorldWide vice president of U.S. market development. Currently the Nashville Better Business Bureau is using the card for its employees.
Companies and their employees will know that a trusted source is providing the payroll cards, and they will receive a fair deal because it comes with the Better Business Bureau seal, Dargan contends.
"Having the stamp of the Better Business Bureau reassures corporations they have the right product," Dargan tells Prepaid Trends.
The bureau is offering the card so businesses can reduce their use of paper checks, says Kathleen Calligan, president and CEO of the Nashville Better Business Bureau. The goal is to save money on printing and mailing checks and to make it easier for companies to distribute payroll, she says.
 The bureau plans to sign up 50 businesses through January to make sure that the card works properly and then offer the card to its entire membership of more than 5,000 businesses, Calligan says.
Businesses that want to be accredited by the bureau must be in business for at least one year, respond to any complaints made by consumers through the bureau and demonstrate truth in advertising, Calligan says.
Verities Inc., a prepaid card manager based in Clarksville, Tenn., manages the TrustCard program, providing marketing assistance and managing the relationships with issuer and processor. Palm Desert (Calif.) National Bank issues the cards, and i2c Inc., which is based in Redwood Shores, Calif., processes the card transactions, Dargan says.
Besides the Nashville bureau, Verities is helping the Better Business Bureaus in Minneapolis; Dupont, Wash., which covers western Washington state, Oregon and Alaska; and Jacksonville, Fla., offer the cards to their member businesses, says Sandra Derby, Verities vice president.  
Those bureaus represent more than 25,000 accredited businesses, and Calligan says she would like to see 400,000 cards in the market by the middle of 2009.
For employers with 25 employees or less, the card simplifies paying workers because they can direct all the payroll into one funding account that then distributes the funds to the individual cards, Derby says. "They fund that virtual account and, with one upload of a spreadsheet, they can load all the cards for their employees, she says.
Cardholders may use their cards at any of the 27 million point-of-sale locations and 1.3 million ATMs within MasterCard's network, MasterCard says.
Accredited businesses pay nothing to offer the cards, and cardholders pay no activation fees, Derby says. Direct deposits are free, as are signature-based purchases. ATM withdrawals are subject to a $1.50 fee, and cardholders pay 75 cents to transfer funds from a bank account to their card accounts.
Most of the revenue for Verities, i2c, the Bureaus and Palm Desert comes from acquirer-paid interchange, Derby says. Consumers can reload the card at Western Union locations for $3.95, and anywhere within the MasterCard rePower network. Individual merchants within that network set their own reload fees, Derby says.
Though the payroll card can benefit consumers without bank accounts, Calligan says the bureaus also will promote the card to individuals who have checking accounts as a budgeting tool and as a convenient way to share funds with family members through companion cards.
 The cards also offer instant-notification features using cell phone text messages to help cardholders keep track of balances and alert them if any fraudulent activity might occur, Calligan says.
"With these notifications, you always know how much money you've spent, where you spent it, and how much money is in your Trustcard account," she says.