Solving the problems paves the way for a direct-deposit system but does not 

 assure beneficiary utilization of it. By extrapolation of the interest 

 expressed in direct deposit it was determined that about 3 million beneficiaries 

 might elect the direct-deposit option at its inception. Once implemented, 

 iL iS likely that finan c*al organizations will persuade a significant portion of the 

 79/. of current beneficiaries who already are account holders to use a direct- 

 deposit system. 



It is clear that there are no significant impediments to inaugurating a direct- 

 deposit program. Such a program would be advantageous to social security 

 beneficiaries and provide the Government and financial organizations the 

 potential for certain economies. A further refinement of the direct-deposit 

 concept could involve the electronic transfer of recurring benefit payments 

 through the wire transmission facilities of the Federal Reserve Banks 

 and other similar networks to financial organizations for credit to beneficiaries' 

 accounts. 



Figure 1.1 illustrates the advantages of a direct-deposit system. 



DIRECT-DEPOSIT ADVANTAGES TO SOCIAL SECURITY BENEFICIARIES 



1. Insures uninterrupted deposits even though the beneficiary 

 changes his mailing address 



2. Reduces the possibility of loss, destruction or theft and 

 forgery of benefit check 



3. Eliminates the inconvenience of check cashing 



A. Offers the most direct method for those who deposit all of 

 their payment to an account in a financial organization 



D I RECT-DEPOSIT ADVANTAGES TO THE U. S. GOVERNMENT AND FINANCIAL ORGANIZATIONS 



1. Reduces check thefts and forgeries (About 1/3 of current forged 

 checks are cashed in financial organizations ) 



2. Reduces non-receipt claims and stop payment actions 



3. Improves beneficiary/customer service 



4. Provides greater efficiency in processing deposits 



FIGURE 1.1 



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