Improving the way governments make payments can help drive efficiency and empower administrations to better serve the public.
The acceleration of digital transformations over the last few years isn’t just limited to e-commerce and the private sector.
The public sector, including federal, state, and local governments, is increasingly embracing digital technologies that better meet the demands of serving the public, particularly when it comes to making government payments.
From benefits and social disbursement to emergency relief and aid, government offices have wide and varied needs when it comes to disbursing funds to the public. But cash and check payments often bring with them higher costs, slower processes, increased risk of fraud, and a lack of end-to-end control.
Add to that the fact that increasing financial inclusion is a prime focus in our post-pandemic world, and it’s apparent that a modern payments solution is required. Government offices can use prepaid cards to ensure a smoother delivery of government payments with greater control and lower costs.
How Do Prepaid Cards Work?
Prepaid card solutions offer a streamlined, cost-effective way for governments to make payments and serve the public. Funds are loaded onto the cards as needed, and cardholders can then use them just like a regular debit card.
Cardholders are limited to spending by the balance on the card, though officials can reload the cards remotely if and when more funds are needed. This is unlike most credit cards (which offer a credit facility) or debit cards that might come with an overdraft facility.
Funds delivered this way are automatic, secure, and electronic, so it’s no wonder that government-administered prepaid cards are on the rise. In fact, according to the Federal Reserve, government payments disbursed this way increased from $135 billion in 2019 to $409 billion in 2020. That’s an increase of around 200 percent!
The Benefits of Prepaid Cards for Government Payments
Traditional government payments processes are paper-heavy, slow, and costly. Switching instead to a prepaid payment system delivers multiple benefits to both government agencies and the citizens they serve.
Benefits for Governments:
- Saves time: Accounts staff will spend less time on the paperwork associated with other payment methods, giving them more capacity to take on other commitments.
- Secure: Tech-enabled prepaid card solutions bring more security to the process by eliminating the risk of check fraud and minimizing the potential for human error.
- Supports financial literacy: Empowering constituents to control their spending improves financial literacy in the community, something that’s a high priority for governments on both a national and local level.
- Fast and efficient: During challenging times when funds are urgently needed, prepaid cards can be set up and delivered in a matter of days, getting payments to the most vulnerable constituents right when they need them.
Benefits for Constituents:
- More security: Prepaid cards eliminate the need for constituents to hold cash or paper checks, both of which, if lost or stolen, are gone for good. Prepaid cards can also be canceled and reissued remotely.
- Inclusive to all: No bank account or credit screening is necessary for payments made using a prepaid payment system. With around 7.1 million households reported as unbanked in 2019, it’s a much more financially inclusive solution.
dash™Disbursement With Prepaid Technologies
Whatever the reason for funds to be delivered, government payments often come with a sense of urgency.
Choosing a secure, fast, and effective digital solution like the dash™ card prepaid payment system means funds get to those that need it the most when they need it the most. Administrations at all levels will find their finance teams working more efficiently and with more time to focus on other crucial activities that help serve their constituents.
To find out more about our expertise in the government payments space, reach out to speak with one of our payments specialists today.
