The Wall Street Journal reports today that Social Security is planning on disbursing funds using prepaid debit cards instead of checks.
This is significant for two reasons. First, it redistributes the costs of Social Security payments among the federal government, social security recipients, merchants, and banks. Second, it represents the federal government’s most major outsourcing of payments and creates a potential benefits provision monopoly. The Because of this monopoly situation, Treasury and Social Security Administration need to ensure the reasonableness and fairness of any consumer fees associated with Social Security debit cards.