How Prepaid Debit Cards Can Offer Fast, Secure Aid To Vulnerable Families

Local and state governments are stepping in to fill a gap in the federal pandemic assistance program as a means of supporting undocumented immigrants and their families. Swiftly and safely delivering such relief involves more than just pressing a button, however. Administrators must take many factors into account when strategizing disbursements for these residents, as they are often unbanked and wary of providing personal details to government officials.

A growing number of states have launched relief programs for those who have been shut out of other emergency aid sources. This includes Rhode Island, where immigrant- and refugee-focused nonprofit Dorcas International Institute of Rhode Island is partnering with the state government to administer the weR1 RI Relief Fund, which is designed for financially affected residents who have not received other benefits because of their immigration statuses.

PYMNTS recently held two separate interviews with Kathleen Cloutier, Dorcas International’s executive director, and Rose Jones, director of Rhode Island’s Office of Healthy Aging and head of its quarantine and isolation work group, in the days following the program’s launch. They discussed why state officials turned to prepaid debit cards to provide these critical funds and detailed how this choice best supports undocumented families in need.

Millions in Need

Many households are facing financial strains and receiving limited support, a situation that is prompting the launch of programs like weR1. The nation’s 11 million undocumented immigrants, including those who pay taxes, are being left out of key social safety nets like unemployment benefits and federal CARES Act funding. The latter program also denies relief to U.S. citizens who are the spouses or dependent children of undocumented immigrants. This group could be large: Per estimates from 2017, approximately 8.2 million citizens live with undocumented family members. This means a sizable share of residents have been placed in precarious positions during the economic downturn and public health crisis.

Many residents have lost jobs or had work hours reduced during the pandemic, causing them to fall behind on rent and forcing them to move in with family or friends, Cloutier said. Some are also struggling to afford food costs and medical expenses. weR1 continues to fundraise in hopes of serving the largest possible share of the estimated 14,000 undocumented households in Rhode Island, Jones said. Cloutier explained that the program’s initial goal is to provide 7,000 of these families with $400 each to help blunt some of their financial pains.

“The majority of people we’re talking to have been suffering and struggling financially for four months now,” Cloutier said. “Many people lost their jobs right away and haven’t been able to find other jobs. People are in dire straits, frankly. The longer you go without resources, the more difficult it gets. … We’re hoping that this mitigates some of that angst and stress and keeps food on the table.”

The entities administrating weR1 prioritize reaching as many needy households as possible, which necessitates providing modest funding to each family. The money is not enough to offset rent, but could be used to pay for food and prescription medicines, Cloutier said, with similar programs in other cities and states identified as the top two uses of financial assistance provided to undocumented residents.

Swift and Private Disbursement

The federal government initially sent stimulus money via paper checks or direct deposit, but weR1 administrators determined that neither method would be likely to work well for undocumented immigrant communities. Many recipients are unbanked, making direct deposit impossible. The program also needed to ensure quick access to funding without causing recipients to lose money to check-cashing fees or requiring formal government identification.

“If you go to a check-cashing place, often they’ll charge a fee that’s deducted out of the amount of the check,” Cloutier said. “You have to have a government ID in order to go to a bank, or banks won’t cash a check if you don’t have an account there.”

The program’s administrators realized that prepaid debit cards would provide smoother funds access. Recipients could use the cards online, in stores or at ATMs without incurring any nonstandard fees, Cloutier said. Jones attested that finding a disbursement method that enabled recipients to shop online was a priority due to the public health crisis.

“Whenever possible, we want to develop opportunities for people to physically distance while ensuring their basic needs are met,” Jones said. “It’s absolutely critical, and another reason we went with the debit card.”

Cloutier noted that another key factor was recognizing that undocumented immigrants are understandably concerned about how authorities might use their identifying information, which led the program to make the cards anonymous.

“Given this [population’s concerns], sharing personal information in any way that can be traced or tracked is frightening [to them],” Cloutier explained.

Recipients’ names are not printed on the cards, which also do not require personally identifiable information (PII) to be activated. This approach enables administrators to freeze cards that are lost or stolen and issue new ones with the remaining balance, all without asking for recipients’ names.

The federal government has begun issuing CARES Act funds on prepaid debit cards, but Dorcas International decided to disburse the weR1 cards via partner organizations in each community the program aims to serve. This move intends to allow local groups to connect undocumented immigrants with weR1 program applications and disburse the cards to approved applicants while ensuring they do not go missing in the mail.

“We’ll send out unloaded cards — which are assigned to applicants by serial number — to the partner agencies,” Cloutier explained. “When the partner agency receives a card, they’ll call us and we’ll load them at that point. We’re not mailing out loaded cards. I think most agencies will have folks pick up cards at the curbside, to ensure that people who are supposed to get the cards are actually receiving them.”

Informed Interventions

The Rhode Island government doesn’t learn any personal details about the card recipients, but Jones said it does track generalized information about the spend categories and neighborhoods where the cards are used. That data enables the state to better identify and respond to the most pressing needs of residents in different regions, she said.

“The [purchasing] category is what we’re really looking at: spending on food versus gas versus [utilities]. It’s helpful as well to know the geographic spread, because we can better target interventions in certain areas,” Jones said. “We don’t get down to personal data — not down to ‘this person spent it at this address.’ It’s more, ‘[the transaction is] in Newport County’ or ‘it’s in the Providence metro area.’”

Such debit card data enables the state to improve its social safety net, Jones said, allowing the government to adjust its own programs and help bolster those of nonprofits, like neighborhood food banks, if it notices that many of the cards in those areas are being used to purchase food, for example.

“It’s data like this that helps inform those sorts of interventions — like, where around the state do we have food deserts and therefore need a greater surge of food supplies?” Jones said. “It’s looking at our programs, programs that are run out of … other state agencies, and making sure we’re best leveraging the dollar and meeting the need.”

The COVID-19 pandemic is causing strain for families across the U.S., but relief funds can soften the blow for many households. Disbursing funds onto anonymous, fast and easy-to-use prepaid debit cards could ensure that all residents receive needed assistance without worrying about fees or personal risk.