The U.S. Department of the Treasury is going electronic. And in switching from paper checks to electronic payments to pay all federal benefits, the Treasury expects to save $120 million a year.
Starting May 1, Americans applying for federal benefits such as Social Security or Veterans Affairs will exclusively receive electronic payments made through either direct deposit to a bank or credit union account or to a prepaid debit card.
"This is a move that benefits all parties involved," said Dennis Simmons, AAP, president and CEO of SWACHA, a not-for-profit, Dallas-based regional electronic payments association and a member of the Treasury's Go Direct public education effort. "Electronic payments are more secure than paper checks and are deposited faster than paper checks. They also help the Treasury reduce costs by eliminating printing, postage, and labor and equipment costs associated with paper billing, not to mention the environmental benefits of eliminating the use of paper, reducing the number of trucks on the road and so on."
About 11 million Americans who currently receive federal benefits dispersed by paper check will also be moved to electronic payments by March 2013. The estimated savings of $120 million annually kicks in as the processing, postage and paper costs of distributing checks to that large population go away.
The Treasury launched a public information campaign called Go Direct to help educate the public.