WASHINGTON--President Barack Obama will announce on Friday that the federal government will boost security for government-issued debit cards, according to people familiar with the matter, amid increased concern about the security of Americans" financial data.

The government will start distributing federal benefits, such as Social Security payments, via debit cards that contain an internal chip that makes them less vulnerable to fraud, Mr. Obama is expected to say.

The White House late on Thursday said Mr. Obama on Friday "will deliver remarks on steps the administration is taking to safeguard American consumers" financial security." It didn't elaborate.

The Obama administration is expected to issue an executive order mandating a push to more-secure card technology for federal benefit cards as a way to respond to several high-profile data breaches at retailers and financial institutions, according to industry groups briefed on the plans.

Industry groups have been in talks with the White House about the issue over the past week.

The planned White House announcement was reported earlier by The Hill.

The new cards, which are gradually being rolled out by U.S. card issuers, will contain a computer chip in addition to the traditional magnetic strip on the back to enhance security. Merchants are installing new card-reading devices at the cash register to accept the cards.

Mr. Obama is scheduled to make the announcement at the headquarters of the U.S. Consumer Financial Protection Bureau, accompanied by executives from major retailers and financial firms.

The change would impact people who don't have bank accounts and receive federal benefit payments through debit cards, including Social Security retirement and disability payments and veterans" benefits. The Treasury now requires beneficiaries to receive their payments either as a direct deposit into their bank account or via a debit card.

As of mid-2013, about 5.5 million beneficiaries received their benefits through this debit-card program, called "Direct Express." Comerica Inc. is paid by the Treasury Department to issue cards for the Direct Express program.

Chip cards have been used widely in Europe, Asia and Canada for years but they have been slow to take hold in the U.S. Recent security breaches have renewed interest in rolling them out. Bank of America Corp. and lender SunTrust Banks Inc. are putting chips on plastic sent to new customers or existing customers whose cards are expiring.

U.S. lenders are expected to issue more than 575 million chip-equipped credit and debit cards by the end of 2015, representing roughly half of the one billion cards now in circulation, according to a task force that includes nine of the country's largest payment card issuers.

Write to Alan Zibel at alan.zibel@wsj.com

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