The US Treasury announced that it is allowing recipients of social security and other federal benefit payments to receive prepaid debit cards. This allows many people who were previously unbanked to have increased access to their funds, without having to cash a check first.
The Direct Express® card will be managed by Dallas, Texas based Comerica Bank. Comerica was chosen because of its experience in administering similar prepaid card programs for several state governments.
This new program is expected to streamline the process of getting benefit payments in the hands of those who need them most. It is designed to eliminate many of the delays that bad weather and lost mail can create.
According to the US Treasury, 4 million Social Security and SSI recipients lack bank accounts. It is hoped that this new program will help these recipients receive their funds faster, while at the same time providing greater efficiencies at the federal level.
Administrative costs are expected to be lower, as most problems linked to payments have been made by paper check rather than direct deposit programs. These debit cards should reduce problems and allow the overall cost per recipient to be lower, saving the government money.
Tags: Comerica Bank, Direct Express