Will payments become cheaper and more secure?
The Treasury Department plans to introduce a prepaid debit card for Social Security recipients in an effort to provide safer and cheaper benefits payments.
The Direct Express debit card, set to be announced today, will be introduced in a handful of states this spring and rolled out nationwide by the end of the summer. Dallas-based Comerica Inc.'s Comerica Bank has been selected as the card issuer for the program, which is targeted at Social Security and Supplemental Security Income recipients who don't have a bank account.
The card could mean significant cost savings for benefits recipients as well as the federal government, Treasury officials and banking experts say. People who sign up for the card will also gain faster access to their money and avoid some security problems, like stolen checks.
But there are some cardholder fees associated with Direct Express, and a significant education effort may be required to get users to accept and understand the card.
The debit card is part of a broader effort by the Treasury to move to electronic payments. In 2005, the department started its Go Direct campaign, which is designed to encourage benefits recipients with bank accounts to switch to direct deposit.
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