In an attempt to get more stimulus dollars in the hands of citizens more quickly, when it can have more of an impact, there has been a push to use alternative payment types, including prepaid cards. Mastercard informed PaymentsJournal that Economic Impact Payments will now be permitted on prepaid cards, but there will be a heavy reliance on the recipients to make that happen. Here are some of the details:
- The Social Security Administration announced that those who receive social security benefits on their Direct Express prepaid card will get their stimulus funds here too.
- Consumers who haven’t filed taxes in the past two years are slated to get a paper check. Consumers can now go to the IRS website and update their account information so that they will get their payment more quickly. They can enter checking account details OR they can enter a routing number and a General Purpose Reloadable (GPR) prepaid card number instead.
- Consumers without a checking account or a GPR card can get one at a retailer or instantly online through a prepaid card provider.
- Entering card data will require some explaining. Mastercard stated that they have prepared marketing materials to help get the message out:
Working with the Treasury and our partners, we will offer the option for those who have any general-purpose and reloadable Mastercard prepaid cards to have those stimulus funds directly deposited onto that card. We are working with these partners this week on educational materials to consumers in order for them to understand what they need to do.
During these unprecedented times, this convenient alternative to the physical checked issued by Treasury will allow millions of Americans to potentially expedite the process and have faster, safer, and secure access to their money and save on the hefty cashier-check fees (and avoid unnecessary contact with cash!)
A prepaid option will help, I am sure, and the large GPR issuers will likely be getting emails out to their cardholders to help. But I also see issues. Treasury is already cutting check files to mail checks to individuals. If you want to enter GPR information, you need to first go to the IRS Get My Payment site and see if a check is already being processed. If it is, then funds won’t be deposited to a card. Consumers will inevitably enter bad card information by mistake. That will create a retuned transaction that will need to be managed by another group of “heroes”.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group