Direct deposit was once novel. To encourage employees to sign up for checkless paydays, the federal government declared May direct deposit month. As government declarations go, it’s been a success—most employees do have their pay deposited directly into their bank accounts.
Most isn’t all, however. Remember, some employees don’t even have bank accounts. For employees in that latter category, plastic paycards are an answer. Or maybe not.
Direct deposit can squash check fraud. The art (and crime) of check kiting hasn’t gone away. Then there’s identity theft, which flourishes with easy-to-duplicate checks and color copiers, and which can spook even employees who signed up for direct deposit. Finally, most state laws still prohibit you from making direct deposit mandatory.
• WHAT WORKS: These developments force you to use expensive fraud-proof checks. While you can’t eliminate paper checks altogether, the fewer you use, the be...(register to read more)