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« Once again, it's "PIN fraud" not "chip and PIN fraud" | Main | Out of touch »

Setting the right example

By Dave Birch posted Feb 29 2008 at 10:21 AM

[Dave Birch] As you may recall, the US Treasury Department is introducing a pre-paid debit card that will be used to deliver benefit payments to social security recipients. According to the Wall Street Journal, the Treasury selected Comerica Bank as the card issuer for the programme, which will see social security recipients who don't have a bank account given a "Direct Express" prepaid that will be loaded directly with welfare payments. The move is, in a way, obvious because the pre-paid card market is as a key place to bring financial services to the unbanked. Note that ss many as 40 million US households either have no bank account or make little use of banking services, according to research conducted by Chicago's Center for Financial Services Innovation. The card is being introduced to provide benefit recipients with faster access to money and eliminate some security problems, like stolen cheques, but it will also save money because it must cost considerably less to make an electronic payment than to print and mail a cheque anyway.

This really should be government policy in the U.K. as well. The government mails out hundreds of thousands of cheques every month and I'm sure plenty -- if not the majority -- of these go to people who have a bank account anyway, who don't have a bank account but should get one and stop wasting taxpayers' money, or who don't have a bank account and don't need one but should get a prepaid card instead (if they weren't so expensive here) and stop wasting taxpayers' money. Given the significant savings, perhaps the government should even go down the BT route and give people more benefit if they are paid by direct debit, sharing the cost savings with the customers, so to speak?

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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Comments

"Now the UK Government has a Bank of its own (Northern Rock), perhaps it should open bank account for all claimants."

Brilliant, brilliant suggestion.

Now the UK Government has a Bank of its own (Northern Rock), perhaps it should open bank account for all claimants. The moneys in these new accounts should help reduce Northern Rocks reliance on Government support, and keep more of the Northern Rock branches open, thus increasing tax revenue, saving money, and increasing the speed claimants had access to their funds so everyones a winner.

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