Canadian Gov’t Gauges Interest in Prepaid for Federal Benefits (July 14, 2014)
With the Canadian government planning to phase out paper checks by 2016 for federal benefits recipients, half of Canadians who are unwilling to use direct deposit would be willing to try receiving their benefits on a reloadable prepaid card, according to a public opinion report released earlier this year and commissioned by the Public Works and Government Services Canada (PWGSC).
Forty-three percent of survey respondents said a prepaid card was not an acceptable alternative for receiving federal benefits, and 6 percent were unsure or gave no reply. The PWGSC ordered the report to understand Canadians’ level of awareness of the government’s direct deposit initiative and why they haven’t enrolled in direct deposit.
“Not only would using prepaid cards for federal government benefits payments in Canada provide an innovative solution for Canadians who don’t receive or don’t wish to receive their benefits by way of direct deposit, it also will be in keeping with similar government benefit programs offered in the U.S.,” says Jacqueline Shinfield, partner with the Toronto office of law firm Blake, Cassels & Graydon LLP.
One of the programs Shinfield is referencing is the U.S. Treasury Department’s Direct Express reloadable prepaid card program that distributes Social Security benefits to 4.85 million recipients. The prepaid MasterCard cards are issued by Comerica Bank.
“This use of prepaid cards also may have the corollary effect of expanding the prepaid card market in Canada, providing even greater opportunities for industry stakeholders,” Shinfield tells Paybefore.
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