Green Dot will manage the US Department of the Treasury's new debit card program, according to an announcement released this morning.
The new account will give Green Dot 600,000 new accounts. Green Dot already has 3.3 million customers for its card.
Treasury is hoping to save a lot of money. Printing a paper check costs about $1. Sending a payment through direct deposit costs about ten cents. Treasury will spend $1.5 million to make the switch, but that cost will easily be recouped and should result in a net savings of more than $3.5 million for each round of deposits sent to the new recipient class. The new accounts will be used to send tax refunds.
This should be a great deal for consumers that still haven't moved from check cashers over to a direct deposit-enabled debit card.