MasterCard, Comerica Bank financial education program attracts 50,000 federal benefit cardholders

Andrew Gillen

Andrew Gillen

PayPerks, a financial education program offered to federal benefit recipients who use the U.S. Treasury Department’s Direct Express prepaid card, recently reached  50,000 participants who have taken nearly 300,000 online education modules since April.

The PayPerks program is a financial capability and rewards platform designed to help cardholders maximize the benefits of their prepaid debit card by rewarding them for learning about the card’s features and for using the card in ways that save money and maximize convenience and security, MasterCard’s Andrew Gillen said.

Gillen compared the incentive-based structure of the PayPerks platform to a program run by the Department of Health and Human Services that provides monetary incentives for Medicaid beneficiaries who “change their health risks and outcomes by adopting healthy behaviors.” Similarly, the behavior changes promoted to Direct Express cardholders, Gillen said, “can have a dramatic and positive effect on their ability to manage their financial lives,” reports.

Comerica Bank, in partnership with MasterCard, provides the Direct Express card program, which allows the Treasury to make electronic benefit payments to unbanked Americans. According to Treasury, the government saves 94 cents for each payment it makes to a Direct Express card compared to the cost of a paper check. As of June 2012, 3.6 million people had signed up for the Direct Express card.

President and Chief Executive of the Center for Financial Services Innovation Jennifer Tescher said that the effort “represents the kind of public-private collaboration that will be required to turn government payments into a teachable moment,” according to American Banker.

The PayPerks financial education platform was created by the firm of the same name, a N.Y.-based startup. PayPerks partners with financial services providers to customize its program for each of their card programs and layers the rewards program on as an added consumer benefit. The program is provided without charge to the government or the Direct Express cardholder.