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Don’t confuse this with junk mail: The IRS is sending 4 million stimulus payments via prepaid debit cards

May 29, 2020, 1:56 PM UTC

Uncle Sam is swapping paper for plastic.

After mailing tens of millions of paper stimulus checks to Americans across the country, the federal government is set to send 4 million “economic impact payments” in the form of prepaid debit cards, the Internal Revenue Service announced this week.

The Visa-branded cards will arrive in plain envelopes from “Money Network Cardholder Services,” and will allow Americans to receive up to $1,200 in stimulus funds each to directly make purchases anywhere that accepts Visa; withdraw cash from ATMs (and from select in-network ATMs without fees); transfer funds from the card to their personal bank account; and check the card’s balance online or by phone.

The IRS noted that individuals cannot specifically opt to receive the “EIP cards,” as they’re known, over a paper check. According to the Treasury Department, the cards are being distributed to individuals who don’t have their bank account information on file with the IRS, and whose tax returns were processed by the IRS service centers in Austin, Texas, and Andover, Mass. The first cards were mailed out last week.

The deployment of the PIN-activated, prepaid debit cards comes after criticism of the government’s technologically outdated approach to disbursing stimulus funds. The IRS’s “Get My Payment” portal, designed to allow Americans to provide their direct-deposit bank details and track the status of their stimulus payments, has been beset by technical challenges, while the decision to dole out payments via paper checks struck many as archaic.

The IRS already allowed individuals to receive stimulus payments via their own reloadable, prepaid debit cards by providing their account and routing numbers through the “Get My Payment” portal. Kathryn Cleary, Mastercard’s senior vice president of business development, has lauded prepaid debit cards as a quicker, more efficient way to send stimulus funds to tens of millions of unbanked Americans. 

“Receiving funds by check can create additional financial hardship for the unbanked,” Cleary said last month, noting that Americans spend $1 billion on check-cashing fees annually.

The EIP cards are being issued by MetaBank, the financial agent for the Treasury Department’s U.S. Debit Card program, which provides prepaid debit cards to federal agencies for non-benefit payments. Already, there are reports of people mistaking the nondescript envelopes and unassuming debit cards for junk mail, and discarding them in the trash.

According to the Treasury Department, the federal government has already delivered more than 140 million stimulus payments worth a combined $239 billion. The payments are part of the $2.2 trillion coronavirus aid and stimulus bill known as the CARES Act.