EFTA Studies Use of Debit Cards by State Governments

In its accompanying white paper, “Debit and Stored Value Cards for Government: A Growing Trend, but States Could Do More,” EFTA outlines areas of potential growth for prepaid debit cards, as well as the organizational, technical and regulatory barriers to adoption.

Among the survey findings:

• Government agencies remain overwhelmingly positive about the potential of prepaid debit cards to improve operations and reduce cost
• Child support payments remain one of the most visible and popular use of prepaid debit cards
• Most states have yet to convert such likely payments as unemployment compensation or employee payroll to debit cards

“This survey and white paper are the first detailed look at the electronic payment practices of state and local governments,” said Kurt Helwig, president and CEO of EFTA. “Obviously, with billions of dollars in aggregate payments and millions of payees, the state payment market could improve efficiencies and realize significant savings through the adoption of debit cards.”

The survey was completed in March 2006 and was the work of EFTA’s EBT Industry Council, the nation’s longest-standing professional association for organizations involved in government payments. The Council’s Task Force on Electronic Payments produced the white paper.

By surveying current payment practices and focusing on the legal and regulatory issues facing card adopters, “Debit and Stored Value Cards for Government” identifies areas for growth in this emerging payment segment, said Helwig.