The U.S. Treasury Saves with Cashless Program
Walt Henderson | December 20, 2011
(From MasterCard's "Cashless Pioneers")
Earlier this year, we announced the retirement of the paper check in favor of electronic commerce, whereby Social Security recipients and others now choose either direct deposit or sign up for a prepaid debit card.
While the prepaid option can be for anyone, a significant number of federal benefit recipients are either unbanked or underserved. It is our job to provide their payment in a safe and secure manner, and why we created the Direct Express debit card program.
When MasterCard asked me to author this post, I expressed I am always happy to talk about electronic commerce. This program not only provides great value to Americans who receive benefits, but it’s also saving an estimated $120 million in taxpayer dollars each year. It costs $1 for every paper check issued versus, 10 cents for an electronic transfer. I discuss these savings and benefits in more detail in the video below.
If you’re already using or interested in trying out the Direct Express program, we’re curious to hear directly from you! Please share your feedback or questions with us.
Walt Henderson is a guest blogger and the director of the EFT Strategy Division at the Department of the Treasury’s Financial Management Service.
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Comments
How does changing to a system that is safer and more convenient constitute a stick? It's a win-win, which equals a carrot.
The important question is what is being done with the savings? It would be nice to believe that I might later realize some of what I am currently paying into Social Security, which we Gen-X'ers currently consider to be nothing but a black hole.
If efficiency gains such as this are used to help bridge the gap, then we'll call this one a win-win-win. That equals carrot cake in my book :)
Posted by Joan, 11/01/2012 3:35pm (4 months ago)
Once again, evidence of the embracement of virtual payments, whether fulfilled via ACH or funds transfer to a prepaid plastic or virtual card.
Posted by Brian, 06/01/2012 11:47am (4 months ago)
I think this is a great product. Will definitely help the unbanked an disabled. The savings is significant overall from check to electronic and I hope this continues to grow.
Posted by Linda McCorkell, 06/01/2012 10:05am (4 months ago)
The first sentence captured my attention for its stick-approach to electronic commerce ("EC"). I am a corporate treasury practitioner who uses electronic commerce inasmuch as possible, and I still become perturbed that governments and corporations continue to swing the stick to force consumers down the "chosen path." If you want electronic payments: Incentivize; that's the carrot approach. Instead, we keep beating with that stick because those dratted consumers/customers just won't do what we order them to do. Wrapping the stick in pretty adjectives and adverbs (as this article does) only disguises that it IS a stick. Consumers often have an alternative to corporations who wield the stick with such unceasing vigor. Unfortunately, the people specifically mentioned in this article have limited choices: yield to the stick, or starve. EC saves money for corporations (but, in my estimation, whether EC yields an added cost to the consumer is sparsely addressed); but the government swings a mighty big stick, and somehow those "savings" just get spent elsewhere.
Posted by Anita, 05/01/2012 3:39pm (4 months ago)
Brevity is the soul of wit.
Posted by Scott Harrison, 05/01/2012 9:21am (4 months ago)
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