The Treasury Department has reached a deal with Visa Inc., Meta Financial Group Inc.'s Metabank and Fiserv Inc. to send cards pre-loaded with Covid-19 stimulus payments to hard-to-reach individuals, according to two people familiar with the matter.
Treasury and the Internal Revenue Service have been searching for a faster and more secure alternative to paper checks to millions of individuals whose bank account information isn’t on record for direct deposit with the IRS.
The plan is to scale up an existing product offered by the companies for federal agency payments, known as the U.S. Debit Card.
It’s unclear how quickly the program will launch. Standard implementation for the program takes between 60 and 90 days, according to the U.S. Debit Card website.
Treasury has signaled that it would consider sending prepaid cards to people in order to speed the direct economic relief payments.
“We’re also going to be supplementing our capability and sending out prepaid debit cards so we can get the money out quickly to people,” Treasury Secretary Steven Mnuchin told reporters at a White House briefing on April 21.
Asked about the deal on Tuesday, a Treasury spokesperson said the department was actively exploring options for distributing the payments. The department didn’t respond immediately when asked for further comment Wednesday.
The move is made possible by an April 13 decision by the Consumer Financial Protection Bureau to waive requirements that state or federal governments offer consumers the option to receive either a prepaid card or a check. The decision only applies to payments related to the Covid-19 pandemic.
The administration has delivered more than 130 million payments worth more than $207 billion, according to the IRS’s most recent figures released in a statement emailed Wednesday. In total, the IRS expects to issue more than 150 million payments, a process that could extend into the end of summer or early fall.
The majority of the payments that have already gone out went to individuals who received a refund on their 2018 or 2019 taxes and provided the agency with their direct deposit information.
The coronavirus relief law (Public Law 116-136), known as the CARES Act, tasked the IRS with delivering millions of one-time direct payments to U.S. households. The extra money is meant to lessen any financial distress individuals are facing as a result of coronavirus, which has led to higher unemployment numbers and widespread businesses closures.
Individuals earning up to $75,000, or couples collectively making up to $150,000, are eligible for $1,200 plus $500 for each child under 17. The payment is reduced for people with higher incomes and phases out entirely for individuals making more than $99,000, or couples with income exceeding $198,000.
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