Paying contractors with prepaid debit cards?

Question

I do remote rehabs in small towns paint, fix, flooring, ac type work.  I find contractors using craigslist gigs ads where I give the entire punch list WITH prices I pay.  I've done enough to know a good price.  I always get takers.  Just the nature of small town workers not all are professionalized:  bank account, newer smart phone, have cash to wait for a check to clear etc.

A contractor suggested I use green dot prepaid card to pay him.  I looked into the whole prepaid card idea and it's a great idea.  Just not green dot which makes it tough for me to load my account with cash with direct ACH from my bank to my greendot card. They limit my loading in $200 chunks and force a day or 3 days wait...

I googled: best prepaid debit card 2015 and found good reading.

Anyone find a card that works for them?   ACH 24x7 to my account, then immediate xfer to the contractor's account?

A parallel topic is: giving a contractor a prepaid smart-ish phone.  I've also found that folks often have junk phones and I need to get pictures, txt on short turn around and am willing to seed my work with my own phone if it takes.  Yes it does sound like I shouldn't be fooling with workers this weak.  I agree.  But I rehab in very small towns where I don't have much choice with who I feel I have to take.

Account Closed · Answer

A legit contractor will have a business account with a local bank to make free deposits.

I wouldn’t work with a contractor if they requested payment in a specific manner. Especially if that payment is easily hidden under the table.  While I’m all for paying as little taxes as possible I pay my fair share and need my deductions.

Tristan H. · Answer

@Curt Smith we used American Express Serve and have a couple of cards for sub accounts. However, our new bank has trouble transferring funds to Amex Serve. If your bank can transfer to Amex Serve, I think it works great. You can keep cash in one account, hand a card for a sub-account to the contractor, and instantly move money over as you need. It works great. I need to investigate greendot as an alternative.

Tim Johnson · Answer

If you use quickbooks, they have a 1099 sub pay feature, it runs about $100 a month, but its saves postage and helps tracks payment then will send out 1099 at the end of the year.  In the long run it saves tons of monies if your doing any kind of volume.

Sam Miller · Answer

What solution did you go with?

Curt Smith · Answer

Right, a few problems with your tactic, that your plumber is ok with.

- I have to know their bank account # and take the days it takes to get my bank setup to ACH directly.  You know they tell me the small pennies deposited.

- Bill pay is a paper check, that they still still have to cach the check or worse pay 10% at a check cashing place.

I'm wanting to solve the lag time and save the contractor from the rip off check cashing fees.

Thanks though for the reply.,

Jassem A. · Answer

If they have a bank account, ACH or Dwolla should be good enough to send money I would think.

With my plumber, I will typically send a check using the Bill Pay feature in my bank account  (USAA) and he will receive a check in about 4 days