Bluebird Adds FDIC Insurance, Direct Deposit of Gov’t Payments (March 26, 2013)
American Express and Walmart today announced that accounts held under the companies’ Bluebird program now will be eligible for FDIC insurance and, as such, will be able to receive direct deposit of government disbursements, including Social Security payments, military pay and tax refunds. The companies also have added a pre-authorized check-writing function, as well as the ability to make account deposits by mailing checks to American Express.
Calling the move “the next set of enhancements” for Bluebird, Dan Schulman, group president, enterprise growth, American Express, said the added features reflect feedback from consumers, advocacy groups and government officials the company has received since launching Bluebird as a debit/checking account alternative last October. The new features are only available to cardholders who register their cards with American Express for a permanent account and are not applicable to the temporary Bluebird cards sold at Walmart stores. Bluebird cards continue to be issued by American Express Travel Related Services Company Inc. (TRS), which is not a bank. TRS will ensure that funds it receives for permanent Bluebird account loads are ultimately transferred into an appropriate resting account at an FDIC member bank, which in this instance, is Wells Fargo Bank, an American Express spokesperson confirms.
Bluebird permanent account holders now also can order Bluebird paper checks that are pre-authorized to eliminate the risk of insufficient funds, according to the announcement. Before writing a check, the account holder obtains a unique authorization code online or via the Bluebird mobile app, which he or she then writes on the paper check. The funds are then immediately deducted from the account and held until the check is presented for payment by the recipient.
With the new checking feature for Bluebird, Amex joins many prepaid card companies that offer similar features as well as others looking to replace traditional checking accounts. In January, Green Dot Corp. debuted its FDIC-insured GoBank “checkless transaction account,” and Discover Financial Services in February unveiled its Discover Cashback Checking online banking service, which is set to include checking, mobile check deposit and bill pay capabilities upon the program’s planned launch next year.
Since its launch less than six months ago, the Paybefore Award-winning Bluebird program has drawn significant consumer interest, racking up 575,000 card accounts and $275 million in deposits—figures American Express released in January.