It is critical that Direct Express® cardholders have the strongest possible protections against criminals who may want to steal their benefits. Direct Express® strives to balance accessibility and convenience with strong security. It does this by building in technological protections from fraud, conducting proactive oversight of transactions, and making extensive cardholder education and customer service easily available to all cardholders.

One reason for switching federal benefit payments from paper checks to a modern prepaid debit card was that it would improve consumer protections, especially for those who depend on their monthly benefit for basic living expenses. Individuals receiving federal payments electronically rarely have delays or problems with their payments.  In contrast, based on payment claims filed with Treasury, more than 40% of the problems with Treasury-disbursed payments are related to paper checks even though checks constitute only 5 percent of all Treasury-disbursed payments made by the federal government.

Direct Express® means that beneficiaries no longer have to endure the inconveniences and vulnerabilities associated with the delivery of benefit payments by paper check. They do not have to wait for a check to be delivered in the mail or deal with the possibility that it might get lost or stolen, and, critically, cardholders do not bear the same risk of loss or theft once cash is in hand. In a recent survey, 96 percent of cardholders said that they feel safer with Direct Express®.

That does not mean, of course, that fraud has been eliminated. Fraud occurs throughout the payment system. With 4.5 million cardholders and payments totaling billions of dollars per year, the program will always be a target for would-be criminals and Direct Express® has a clear duty to maintain the very highest standards of security against fraudsters. This has resulted in fraud levels for the program being lower than those in similar prepaid debit card programs.

There are number of ways in which Direct Express® protects cardholders from fraud, including:

Chip Card Technology:

In 2016, Direct Express® integrated the “EMV” chip, into its cards – technology that is considered to be the global standard in card protection. EMV aims to prevent counterfeiting, making it more difficult for criminals to “clone” cards. More than 4.5 million EMV Cards have been issued to date.

Regulation E Protection:

The same consumer protections for fraud, loss and errors that are providedto traditional bank account holders under the Consumer Financial Protection Bureau’s (CFPB) “Regulation E”, are provided to Direct Express® cardholders. Regulation E establishes a basic framework of the rights, liabilities, and responsibilities of participants in the electronic fund and remittance transfer systems. Indeed, in making cardholders whole, Direct Express® often goes further than what is required by Reg E.

FDIC Insurance:

Direct Express® cardholders’ money is FDIC-insured up to the maximum legal limit ($250,000 per depositor, per insured bank, for each account ownership category).

Fraud Monitoring:

Mastercard® carries out monitoring of 100 percent of prepaid transactions, including Direct Express®, worldwide, 24/7. 

Mastercard® SafetyNet:

Direct Express® is also covered by the “SafetyNet” service, a proactive program that reduces the risk of cyber hacking by identifying potential attacks before they occur.


The Mastercard® fraud team provides a regular, detailed review of program protections, measuring types of fraud, merchant categories and security performance against peer programs. This ensures Direct Express® stays at the cutting edge of fraud protection.

Mobile Alerts:

Beneficiaries may sign up to receive automated mobile alerts advising them when a deposit has been made to their account and when their account balance is low, allowing them to self-identify suspicious activity.

24/7 Customer Service:

Direct Express® customer service is available 24/7 for cardholders who notice suspicious activity in their account or have questions about how best to protect themselves.

Today, these protections are supplemented by a focus on educating and empowering cardholders to protect themselves from fraudsters, which you can read about in our next post.