Survey on Use of Debit Cards by State Governments

The Electronic Funds Transfer Association's (EFTA) survey on government payment technology, released today, provides mixed reviews on how quickly government is adopting prepaid debit technology to pay its citizens.

According to EFTA, the survey of over 1,000 government agency managers shows that the use of debit cards is prevalent in a few types of payments, but that states and local governments continue to use checks for many other disbursements.

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."