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Since mid-April, approximately 140 million Americans have received direct payments from the IRS totaling around $239 billion.
Most of these payments were sent out via direct deposit and landed in individuals’ bank accounts that were on file but some also have been sent out via paper check.
But there are still about 10 million Americans who qualify for direct payments that have not received them.
Well, about 40% of these people will receive their payments very soon via Visa debit cards that will be issued by MetaBank.
Basically, the individuals who will receive these cards are those without bank information on file and who processed their tax returns with certain organizations.
“EIP Cards are being distributed to qualified individuals without bank information on file with the IRS, and whose tax return was processed by either the Andover or Austin IRS Service Center,” the Treasury statement said.
The debit cards will be sent from Money Network Cardholder Services, and will come with instructions on how to activate the card. The debit cards can be used to withdraw cash from an ATM, transfer funds over to a bank account, or make purchases just like any other card with the Visa logo on it.
Those who receive the debit card will be able to check their balance and obtain online access to their transaction history at EIPCard.com.
A more efficient solution for many Americans
I have to give props to the IRS when they are due (which can be really tough sometimes).
But in this case, many people who do not have bank accounts or “the under-banked” as they are often called are also some of the people in the most financial need. So creating a mechanism allowing them to receive their funds and use them efficiently is a good move.
Some establishments have offered to allow those individuals to cash stimulus checks for free but now they will also have the ability to use ATMs, make account transfers, and also keep tabs on their transaction history.
Perhaps it will convince many of those people to eventually open up bank accounts in the future?
A new way of sending funds to Americans in the future?
Meanwhile, this could potentially be a new route to receive funds from the government in the future.
Some lawmakers have proposed that the federal government should set up federal accounts for everybody and use those accounts as a way to get them funds in times of need.
I like the idea of every American having an account that can have funds directly injected into it for various purposes but it may not be necessary (for now) given that after a bumpy start, it looks like the direct deposit feature from the IRS was mostly figured out.
But there are a lot of people who could probably benefit more from receiving a pre-loaded debit card rather than a check.
This is just my pure speculation, but I think being forced to cash that check in one transaction carries with it psychological impulses to spend more than receiving a debit card.
Although using plastic cards does make people spend slightly more in the long term, I think walking out of a business establishment with $1,200+ in cash in your hands has sort of a “jackpot” feeling for some people that could encourage them to spend it quicker.
Either way, it’s good to see the IRS doing something to make receiving and using stimulus funds more efficient.
I wonder if they will consider allowing people to sign up for this option if a second round of stimulus checks is approved?
If these debit cards can be processed quicker than paper checks, this option could help millions of people get the aid they need much quicker.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. His content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.