Treasury announces introduction of debit cards for Social Security payments
WASHINGTON: The Treasury Department said Friday it would begin offering the option of providing monthly Social Security payments on debit cards, and said it hopes millions of people without bank accounts will make use of the new service.Treasury officials said Comerica Bank had been chosen to offer the new debit cards, which have been given the name “Direct Express.” Officials said Comerica was selected because of its experience in handling prepaid cards for benefit recipients in various state-run programs.
Treasury’s Financial Management Service estimated that 4 million recipients of Social Security and Supplemental Social Security, benefits paid to the poor, do not have bank accounts.
FMS Commission Judy Tillman said that if every unbanked federal check recipient signed up to use the new cards, it would save taxpayers about $44 million per year in reduced costs for printing and mailing paper checks.
“The explosive growth in the prepaid card industry offers an important opportunity for Treasury to give unbanked payment recipients secure, easy access to their funds at low or no cost to the cardholders,” Tillman said in a statement.
“We ultimately would like to see an all-electronic Treasury - with the security, efficiency and cost savings that would entail,” Tillman said.
Officials said they would start to introduce the new card in the spring.
Those who decide to use the cards will have their Social Security payments automatically deposited in their Direct Express card account. Card holders will be able to have access to their money at automated teller machines and financial institutions nationwide, Treasury said.
“Millions of federal beneficiaries remain outside the banking system, which means they don’t have access to payment methods that most Americans take for granted, such as getting cash at an ATM or paying with a card at a store,” said Nora Arpin, an official with Comerica Bank.
International Herald Tribune | | January 5, 2008
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