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In the Cards

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Direct deposit of employee paychecks helps save John Stewart a lot of money and headaches. For several years now, he's not had to budget for paper or labor to produce paychecks for the large majority of Houston-based Methodist Health System's approximately 10,000 employees. But what about the more than 10 percent of the system's workers who don't have a bank account? Stewart, the system's director of human resources, needed another solution that would "get us out of the paper business in HR." That's where Stewart turned to JPMorgan Chase, which has a Visa-branded credit/debit card program that allows employers to pay "unbanked" workers through a card-based system rather than with paper checks. Now he's saving on administrative security and fraud as well as the cost of mailing checks. And rather than waiting in line and paying big fees at a check-cashing store, employees are now able to get their cash at any automated teller machine that accepts Visa, says Stewart.The card-based effort grew out of a years-old Methodist initiative to increase the direct-deposit rate for all employees-thus achieving its goal of becoming a "paperless" human resources office, Stewart says. Methodist has cut "the amount of time spent distributing paper checks, bank fees and significantly fewer stale-dated checks," says Stewart, whose staff promotes the bank card effort to eligible employees at departmental in-services, bank fairs and at new hire orientation. About 1,024 of Methodist's employees-more than 10 percent-have signed up for the card payment program.What does JPMorgan get out of the deal? The cards allow the nation's fourth largest bank to develop a relationship with unbanked employees, as well attract deposits that might otherwise be cashed in full immediately. "Many employees use the card in conjunction with a traditional direct deposit account," Stewart says. "Employees use these cards as a way to put money aside out of each payroll ... without the necessity of setting up a checking or savings account." -Philip Betbeze