Thousands of consumers can receive their Economic Impact Payments (EIPs) much more quickly if they know where to look. As you read this, the U.S. Treasury Department and the Internal Revenue Service (IRS) are working around the clock to get COVID-19 financial relief payments out to individuals and families, but many are stuck waiting for paper checks.
The Treasury has initiated the first traunche of EIP payments totaling $200 billion to approximately 130 million Americans, with millions more facing a possible waiting time of weeks, if not months to receive their payments. This is unacceptable for families who need to pay rent and buy groceries today.
The delay in accessing funds can be reduced, however. Consumers with prepaid cards are eligible to register their cards with the IRS and expedite their federal payment. However, the IRS must take affirmative steps to increase public awareness.
The IRS launched new web tools: Non-Filers and Get My Payment, as part of the strategic plan to disburse CARES Act payments. These portals allow those who did not file taxes in 2018 or 2019 to quickly register to track and receive their relief payment.
According to variety of public reports, the IRS has incomplete information on millions of Americans who may not have filed taxes, did not receive a refund in 2018 or 2019, moved, or who have changed their name due to marriage or divorce. If the IRS is unable to obtain this information, then the agency will likely send them a check, delaying the process of getting needed funds into people’s hands.
On top of the delay of identifying the information of individuals, there is also the delay in cutting checks. The Bureau of Fiscal Service within the Treasury has been tasked with printing millions of checks per week in order to ensure all eligible Americans receive their payments. According to the Consumer Financial Protection Bureau (CFPB), cutting checks is time consuming, and it costs more than electronic payments. If a March memo from Ways & Means is accurate, it is conceivable that Congress passes a Phase 4 COVID-19 relief measure which could include additional EIP payments before some Americans receive their initial payment from the CARES Act.
Last month the CFPB updated its COVID-19 guide to highlight prepaid cards as an option to receive CARES Act relief payments. While consumers can now receive their EIP payment via a reloadable prepaid card by registering their product in the IRS portals, the agency still has not clearly listed “prepaid” as an option alongside “checking” and “savings.”
It is essential that consumers clearly see prepaid as an option. According to the IRS over 11 million people have visited their portals since they were launched in April. If prepaid is not visibly listed on the IRS’s portals it could discourage people with prepaid cards from registering their product with the IRS and cutting down the time it takes to receive their payment from weeks to days. This concern was recently highlighted in a letter from U.S. Representative Bill Foster (D-IL) and U.S. Representative Barry Loudermilk (R-GA) addressed to U.S. Treasury Secretary Mnuchin requesting that the IRS update its portals to make it clear that non-traditional payment methods like prepaid cards are a critical option for millions of Americans to receive their pandemic relief payments.
Now more than ever, it is imperative that we leverage existing payments capabilities and clearly communicate the available technology to deliver relief to all Americans. Prepaid is faster than receiving a check and is efficient and secure. Right now, the federal government has a tremendous opportunity to leverage an existing vigorously regulated bank product to ensure they are ready for whatever the future holds.
Write something about yourself. No need to be fancy, just an overview.