Treasury Solicits Vendors for Direct Express Debit Card Contract Expiring in 2015 (Jan. 14, 2014)
One of the largest prepaid programs in the U.S. has an RFP out for issuers. The contract for the U.S. Treasury Department’s Direct Express reloadable prepaid debit card program to distribute Social Security benefits to 4.85 million recipients, currently issued by Comerica Bank with MasterCard, expires next year, opening the door to interested vendors. The department’s Bureau of the Fiscal Service, formerly the Financial Management Service (FMS) on Jan. 2 announced details of the opportunity, plus requirements for any company that may apply. Application submissions are due Feb. 28, with finalists to be notified April 1 and a decision expected June 17, 2014. Incumbents are invited to participate.
The process of evaluating prospective suppliers for Direct Express, which initially was piloted to Social Security recipients in 2008 and gradually expanded nationwide, is routine, a Fiscal Service spokesperson tells Paybefore. In compliance with the government’s 2010 mandate to deliver all payments electronically, Direct Express guarantees that individuals may receive benefits through electronic channels at a “reasonable” cost, whether or not they have a bank account.
“This is a financial agent selection process, which is different than a typical request for proposal or federal procurements, and the way it is structured gives us the chance to evaluate and identify banks that can fulfill the needs of our program requirements,” the spokesperson says. Fiscal Service said it recognizes financial institutions may choose to provide some of the required services through partnerships with other service providers.
In its notice describing the opportunity and requirements, Fiscal Service said it cannot predict total volume for Direct Express enrollees, but in its solicitation the agency provides recent enrollment trends, including call volumes. In 2013, 1.6 million consumers enrolled for Direct Express and 1.5 million enrolled in 2012.
Fiscal Service will consider applications from financial institutions that can demonstrate the ability to meet various requirements for issuing debit cards to an audience consisting of Social Security recipients, including retirees and their survivors, veterans and disabled citizens, among others. Applicants must describe their proposed partners, pricing and capabilities for providing security and flexibility while meeting the demands of a large audience of benefits recipients, the agency said.