By Michael Scheibach, Executive Editor, BankNews
Another step is being taken to reduce paper checks and to reduce costs in the process, and it's a big one. On March 1, 2013, the federal government will begin all-electronic benefit payments. This is yet another indication of the future of payments -- a future where electronic payments will constitute the vast majority of transactions.
For people receiving federal benefits, two options are available: direct deposit, or the Direct Express Debit MasterCard card.
Banks can play a proactive role by encouraging their customers receiving federal benefits to sign up for direct deposit before the March deadline. The card, which the Treasury recommends, allows federal benefit recipients to pay bills, withdraw cash and make purchases without paying check-cashing fees. The money on the Direct Express card is FDIC-insured, and many card services are free.
"Whether you choose direct deposit or the Direct Express card, you will experience the same benefits of electronic payment: You don't need to go to the bank or credit union to deposit or cash your check every month, you don't have to worry about misplacing your check and you don't put yourself at risk for having your check stolen," said David Lebryk, commissioner of the Treasury Department's Financial Management Service. "Electronic benefit payments also will save American taxpayers $1 billion over the next 10 years."
The Treasury Department is working with more than 1,800 partner organizations to promote its "Go Direct" public education campaign. For more information, visit www.godirect.org.