use for social security payments
The US Treasury’s Financial Management Service (FMS) unit has
called for applications from financial institutions to serve as a
financial agent to provide debit card services nationwide to
unbanked cheque recipients of federal social security (SS),
disability insurance and supplemental security income (SSI) benefit
payments.
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The FMS’s call for applicants follows the piloting of a federal
debit card, the Direct Express Card, by MasterCard Worldwide and US
bank JPMorgan Chase to about 3,000 federal benefit recipients,
primarily in the Chicago and the southern rural Illinois area. The
pilot programme began in 2005.
Features of the Direct Express Card include no monthly maintenance
fee, one free ATM cash withdrawal per month at Chase and Allpoint
ATMs, free point-of-sale transactions at all MasterCard retail
locations and free cashback transactions at retail locations.
The FMS does not provide an estimate of the cheques it hopes to
replace with debit cards in its tender document. However, it
estimated that in 2008, in the absence of an extensive federal
debit card programme, 144.67 million cheques for payment of SS and
SSI benefits would be sent to recipients.
In addition, the FMS estimated that about 27 percent of the SS
cheque recipients and 68 percent of SSI cheque recipients are
unbanked. For the fiscal year 2007, the FMS estimated average
monthly payment for SS cheque recipients at $780 each, and for SSI
cheque recipients at $497 each.
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By GlobalDataApplicants have until 2 October to submit proposals for the scheme,
which is due to commence in January 2008.
