The Bank of New York Mellon (BNY) will serve as the financial agent for the Direct Express program, which provides 3.4 million Americans with a prepaid debit card to receive monthly federal benefits.
The U.S. Department of the Treasury’s Bureau of the Fiscal Service said in a Thursday (Nov. 21) press release that it selected BNY for this role after evaluating proposals from multiple financial institutions and seeing the bank’s offering of features and customer service options.
The new agreement will begin Jan. 3 and will last five years, according to the release.
“Since 2008, the Direct Express program has paid federal beneficiaries seamlessly, inclusively and securely, while sparing taxpayers and customers the costs and risk associated with cashing paper checks,” Fiscal Service Commissioner Tim Gribben said in the release. “This new agreement will further our goals of delivering a modern customer experience and strengthening Treasury’s commitment to paying the right person, in the right amount, at the right time.”
With this agreement, BNY will add to the cardholder experience features like online/digital funds access, bill pay, cardless ATM access, omnichannel chat and text customer service, online dispute filing and in-person authentication options, the bank said in a Thursday press release.
“Drawing on our leading platform capabilities, we look forward to advancing the program’s goal of providing high-quality financial services to individuals and communities throughout the U.S.,” Jennifer Barker, global head of treasury services and depositary receipts at BNY, said in the release.
Seventy-seven percent of the recipients of disbursements opt for instant payments when given the option, according to the PYMNTS Intelligence and Ingo Payments collaboration, “Measuring Consumers’ Growing Interest in Instant Payouts.”
That’s because consumers looking for disbursements — paychecks, government payments, insurance settlements, investment earnings — want their money quickly, the report found.
In October, the Treasury Department credited the Office of Payment Integrity, within the Bureau of the Fiscal Service, with enhancing its fraud prevention capabilities and expanding offerings to new and existing customers.
The department said its “technology and data-driven” approach allowed it to prevent and recover more than $4 billion in fraud and improper payments, up from $652 million in 2023.
The post US Treasury Selects BNY as Financial Agent for Direct Express Program appeared first on PYMNTS.com.
