Canadian government is contemplating prepaid cards for citizens who are unable to receive their federal benefits via direct deposit payments.
If implemented, it could be the first such roll out in Canada, though the practice of having prepaid cards for government payments is already in use in other places.
The move comes in the wake of the government’s initiative of phasing out all paper cheques by 2016 in favour of direct deposit for payments such as Old Age Security, the Canada Pension Plan, disability benefits, Employment Insurance or tax returns.
A survey commissioned by Public Works and Government Services Canada questioned about 500 Canadians on re-loadable cards, which gauged the pulse of the public.
Half of those surveyed agreed that a prepaid card would be an acceptable alternative to cheques or direct deposit.
The government report says that the concept of no-fees with the reloadable cards will endear more people to the idea as banks and credit card companies tend to charge maintenance, network and withdrawal fees whenever a prepaid card is used.
In US, Visa offers a prepaid credit card that governments and public agencies can use to transfer money to citizens who either don’t have a bank account, or in cases where they are reducing costs related to paper cheques, reports Ottawa Citizen. Such cards can also be used to buy goods, and withdraw cash.