As Deadline Looms, Treasury Launches PR Campaign to Push Electronic Benefits

With a crucial deadline just five months away, the U.S. Department of the Treasury is blanketing the country this month with press releases urging recipients of Social Security and other benefits by check to adopt electronic payment.

In the campaign, which started last week, the agency is sending out releases for each state, indicating the extent to which recipients in that state have adopted electronic payment of benefits so far and how many are still receiving checks. A first wave covering 14 states will be followed by weekly sets of releases until all 50 states have been covered. By customizing the releases for each state, Treasury hopes local newspapers will be more likely to pick them up, says Walt Henderson, director of the EFT strategy division at Treasury. “When you localize something, it really piques their interest,” he says.

Under a rule adopted by Treasury in December 2010, all recipients of Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, and Office of Personnel Management benefits and other non-tax payments and some other federal benefits must convert to direct deposit or to the Direct Express prepaid card by March 1, 2013. They will no longer be able to receive checks.

According to Henderson, nearly 3.9 million Direct Express cards are now outstanding, of which some 3.5 million are active. That’s up from 262,000 when the Direct Express program started in 2008. The card’s issuer is Dallas-based Comerica Bank, which has a contract with Treasury through January 2015.

Still, most benefit recipients choose direct deposit into a checking account, with this option accounting for fully 91% of all monthly benefits payments so far, Henderson says. Payments by check have been halved since January 2011, from 11 million monthly payments to 5.5 million, according to Henderson. “We’re actually pretty encouraged,” he tells Digital Transactions News.

But, with the deadline looming, Treasury is now pushing to get check recipients across the country to convert to either the card or direct-deposit option sooner rather than later. “We’re trying to encourage people that you can act now, you don’t have to wait [until the end of February],” he says.

Each press release sent out by Treasury this month details the number of checks sent to recipients in the state each month, the number of electronic benefit payments, and how to sign up for the electronic-payment programs, while urging recipients not to wait. The releases also say there are no sign-up fees or monthly fees for electronic payments.

Among the wave of 14 releases covering Midwest and Plains states sent last week, for example, Ohio ranked first with 209,000 check monthly checks and 2.3 million electronic payments. Illinois ranked second with 157,000 and 2.2 million, respectively. Collectively, the 14 states account for almost 1.1 million checks and 14 million electronic payments.