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Ebook Debit and Stored Value Cards for Government: A Growing Trend But States Could Do More

Submitted by wulan on Tue, 08/25/2009 - 04:02

The use of Electronic Funds Transfer (EFT) is a mainstay of consumer finances, whether in the form of the direct deposit of payroll, automatic account debits for bill payment, or the still-growing use of stored value and debit cards to make purchases or obtain cash. EFT technology is providing consumers, business and government with improved financial instruments that control costs and enhance services. With the advent of Internet access, expanding Automated Teller Machine (ATM) networks, a steady growth in retailer Point-of-Sale (POS) debit capabilities, and the adaptable features of new payment instruments, processes have been streamlined and the options for funds delivery have universally multiplied.

Governments have also been reaping the benefits of these advances in consumer EFT to reduce administrative costs and paperwork, improve program accountability and provide more convenience and security for benefit and payment recipients. For example, the federal and state governments have already realized great advantages from Electronic Benefits Transfer (EBT) cards associated with government programs and payments, one of the most spectacular EFT success stories to date. EBT cards completely replaced the use of paper food stamp coupons under the USDA’s Food Stamp Program in mid-2004. EBT improved Food Stamp Program operations and services to program end-users while streamlining the transfer of billions of benefit dollars into local economies through purchases at grocers of all sizes, from national chain stores to farmers’ markets.

Debit, EBT and stored value cards are simple, reliable and inexpensive. They have proven their worth literally millions of times over in the replacement of checks, vouchers, warrants, coupons, certificates, and other forms of paper long used to transfer value, supporting millions of benefit recipients and providing consumers with access to government-initiated payments. These cards have also proven their worth in the most distressing and demanding of times. Millions of cards have been issued over the past several years to victims of tornados, hurricanes, residential fires and other displacing events a practice that can provide immediate cash and food assistance to victims of natural and man-made disasters of all size and description.

While debit cards provide the convenience, safety and reliability of direct deposit for their users, for governments they are a tool for cost reduction, fraud control, greater accountability and improved services. In contrast, checks and vouchers are labor intensive, expensive to issue and replace, easily lost or stolen, and subject to forgery. Paper checks can also be expensive or difficult for recipients to cash. Cashing a check requires the recipients to keep all of their funds on their person, in their home, or incur the added expense of buying money orders to obtain some form of security for their cash value. Debit cards are an excellent way to serve consumers who have no other banking relationship, reducing the consumer’s cost of accessing funds while enhancing convenience and safety.

Contents

Abstract
Introduction
EFT Card Basics
The Problems with Paper
Expanding the Role of Cards in Government
Practical Card Applications For Governments
Cards and Disasters
Government Payroll

    Youth Employment Cards

Supplemental Nutrition for Women, Infants and Children (WIC)
Child Support
Childcare Provider Payments
Unemployment Insurance Cards
Workers Compensation Payments
Health Benefit Cards and Flex-Benefit Cards
Settlement Fund Cards
Federal Programs

    Social Security Annuities
    Supplemental Security Income
    Black Lung Benefits
    Veterans Administration Benefits
    Railroad Retirement Benefits
    Civil Service Annuities

Cross-Program Card Possibilities

    Law Enforcement Cards
    College / University Prepaid Cards
    Relocation Cards
    Convenience Cards and Gift Cards
    Incentive cards
    Special Funding Cards

Legal and Regulatory Considerations
Fraud Awareness
Conclusion
About the Authors
About the Electronic Funds Transfer Association
EBT Industry Council Task Force on State Electronic Payments Members
Appendix
EFTA Debit Card Survey and Report

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PDF Ebook Debit and Stored Value Cards for Government: A Growing Trend But States Could Do More

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