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the poor lose out: nytimes on wages via prepaid cards July 1, 2013

Posted by Bradley in : consumers , trackback

Jessica Silver-Greenberg and Stephanie Clifford have a great (but depressing) article in today’s NY Times. Banks and employers are increasingly paying hourly paid employees via prepaid cards which carry a range of fees which the payees have to incur to access their money. Employers are given financial incentives to use these cards. There’s a great quote from Chuck Harris, the president of NetSpend, the largest issuer of these cards:

We built a product that an employer can fairly represent to their employees as having real benefits to them

He doesn’t say that the cards actually have real benefits to employees but that employers can “fairly represent” that they do. Netspend’s mission is:

to provide products and services that empower consumers with the convenience, security and freedom to be self-banked

Of course this isn’t about empowerment at all, but about cynical exploitation of those with few choices and limited voice.

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