The Treasury Department hopes that encouraging the unbanked to receive their Social Security benefits on a prepaid card will save $42 million a year, despite several fees.

The agency's Financial Management Service bureau announced the Direct Express card in January and is beginning a national promotion today. Roughly 14,000 people have enrolled since the program went into effect in April, and 10,000 cards have been issued by Comerica Inc.

Comerica charges several fees to use the card, including one to withdraw cash at an automated teller machine, but there is no cost to make debit purchases, and observers said they did not think the charges would deter adoption.

The goal, according to Judy Tillman, the commissioner of the Financial Management Service, is to get the cards into the hands of the 4 million unbanked consumers who receive their benefits as checks. The Treasury says it gets as many as 14,000 calls a month from unbanked recipients who want an alternative to checks.

"About one-third of our benefits payments go to unbanked recipients," Ms. Tillman said. If they opt to use the card instead, "we have the potential to save millions of dollars a year."

The ultimate goal is to phase out checks, she said, though there are no current plans to do so.

Ms. Tillman said the card's fees would not drive away the unbanked, who are already wary of fees associated with bank cards.

In most cases the biggest complaint with using bank cards is overdraft fees, and "that will not exist at all with this card," she said, because if there are not enough funds on the cards, transactions will be declined.

The Treasury tested the cards last year with 3,000 people, 85% of whom were unbanked. Though the card can be used to withdraw money from ATMs, "point of sale was the single biggest use," Ms. Tillman said. "People are using it as a payment card."

They can request cash back at the point of sale, without paying a fee. Cardholders can make one free ATM withdrawal per benefit payment; all other ATM withdrawals are 90 cents each, in addition to ATM surcharges. There is also a 75-cent fee to receive monthly statements, a $1.50 fee to transfer money into a bank account, and a fee for purchases and ATM transactions abroad, among others.

"We find that people are very smart and they learned very quickly" to avoid ATM fees by asking for cash back, Ms. Tillman said. "Most recipients said that the card was less expensive for them to use" than check-cashing services.

Nora Arpin, Comerica's director of government electronic solutions, said enrollment has slightly exceeded the Dallas banking company's expectations.

"The real key to providing the right type of card is to provide something that has the benefits that all of us are looking for with financial products," she said.

Ms. Arpin said Comerica's fees are meant to be unobtrusive to the user. "We believe that the fees, as they are, will not be an obstacle to the cardholders," she said, and it is possible that many will "use the card without fees."

Comerica is more keen on receiving the interchange revenue from the transactions than the fee income, she said.

The card is being promoted by mail in 10 states, though recipients can sign up for the card now, online or by phone; by October, the mail campaign will expand to all 50 states, and by fall the Social Security Administration plans to offer the card as an option for new enrollments, she said.

The Treasury expects 40,000 to 100,000 people to sign up for the Direct Express card this year.

In addition to saving money on mailing checks, the payment cards have security benefits, she said. Last year scammers attempted to pass 60,000 Social Security checks with forged endorsements; other checks were lost, stolen, and delayed in the mail, she said.

Brian Riley, a research director in the bank cards practice at TowerGroup, the Needham, Mass., independent research firm owned by MasterCard Inc., said the card is "a great idea" that has come at the right time.

The fees are less likely to hinder use than the age of the target user, he said. "There is resistance driven by the older demographics on Social Security."

However, rising gas prices may lead even the most unlikely holdouts to use the card to avoid driving to the check-cashing store, he said. "When you factor that into this equation, the timing is really terrific."

Unbanked benefits recipients will probably realize that the fees, except for heavy ATM use, make this product more affordable than checks, Mr. Riley said. "In the long haul, this will be cheaper unless you keep taking out $20 withdrawals."

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