The U.S. Department of the Treasury today launched its pilot program to disperse tax refunds through Visa debit cards.
The program, announced last September, will see the Treasury department mail out 600,000 letters to low- and moderate-income individuals, inviting them to participate by activating a MyAccountCard Visa prepaid debit card provided by prepaid card company Green Dot. Tax refunds will be electronically deposited to those accounts.
"This pilot program will provide low- and moderate-income Americans with a low-cost option for faster delivery of their federal tax refund," said Deputy Secretary of the Treasury Neal Wolin. "This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures."
The Center for Financial Services Innovation, which focuses on financial services for underbanked consumers, today lauded the program, saying the electronic dispersement of funds to prepaid debit cards could ultimately save the Federal government tens of millions of dollars a year.
"CFSI is pleased to see the Treasury’s choice of a GRP card to deliver tax time accounts," said Melissa Koide, policy director, Center for Financial Services Innovation. "It bolsters the credibility of a quickly maturing market already well versed in serving low-income consumers. The pilot is an excellent start to bringing low cost transaction and savings products to millions of tax filers."
The Treasury plans to offer several variations of the MyAccountCard at random to help it evaluate which of several features and fee structures gain the most interest. The department this week also launched a campaign to encourage existing and potential payroll card users to direct deposit their 2010 federal tax refund onto those cards.