Prepaid Cards Are Best For Government Programs, And Here’s Why
Five years ago, an uncontrolled forest fire burned through the community of Slave Lake, Alberta. 400 properties were destroyed and 7,000 residents were directly affected by the fire. Seeing the need to act swiftly, the government of Alberta provided emergency relief funds for affected residents in order to pay for lodging, food, and immediate needs.
How does this story relate to prepaid cards?
To distribute the emergency relief to the displaced residents, the government of Alberta sent out approximately 25, 000 prepaid cards. Why prepaid cards? The speed of delivery was vital in such an urgent situation, and prepaid cards not only allowed for immediate disbursement of funds, but they were also extremely flexible and easy for the affected families to use.
Prepaid cards are becoming more and more popular among government agencies because of the plethora of benefits they provide, as well as the wide variety of programs they can be used for. According to an article by MasterCard, in 2014, federal, state and local governments in the U.S. used card-based programs to administer $148 Billion in benefits and other forms of payments to individuals.
Prepaid card programs are beneficial for so many diverse government programs, such as:
– Tax Returns
– Social Security Payments
– Education Funding
– Social Assistance and Disability Benefits
– Veteran’s Benefits
– Emergency and Disaster Relief Funding
– Child Benefit & Support Disbursements
– Pensions and Employment benefits
– Worker’s Compensation and Unemployment Benefits
Why Government Agencies Should Use Prepaid Solutions
Prepaid solutions can significantly reduce the costs of payment disbursements. In fact, the U.S. Treasury Department estimates that the government saves approximately $1.16 (according to MasterCard) for each payment made electronically rather than paper cheques. Calculate that by the number of cheques issued on an annual basis and the number is staggering!
Streamline Financial Transactions
Prepaid solutions provide efficiency for both cardholders and government agencies. The cards can easily be loaded via a secure online site and benefits are distributed electronically. Recipients do not have to wait days to receive or cash their cheques, and they no longer need to rely on expensive cheque cashing services if they need quick access to the funds. With prepaid solutions, their funds are available immediately.
Increased Convenience for Cardholders
In addition to card holders receiving immediate access to funds, they also have the ability to make purchases almost anywhere in the world, both online and in-store wherever Visa® or MasterCard® is accepted. Cardholders can conduct day-to-day activities with a prepaid card such as paying bills, making purchases, depositing and withdrawing cash, and of course receiving disbursements from organizations such as the government.
A prepaid solution decreases the chances of fraud, theft and loss. Prepaid cards are secure, providing cardholder protection for funds and replacement of card in case of theft or loss. Plus, prepaid cards are not connected to bank accounts, resulting in further protection for cardholders.
Reporting and Greater Transparency
Prepaid solutions offer government agencies the added advantage of a robust back-end reporting system, helping them to monitor all of their transactions, as well as the success of their prepaid programs. Having real-time reporting provides a greater degree of transparency, which reduces the likelihood of fraudulent activities. Better visibility over their accounts also results in an improved level of customer service.
Faster Disbursement for Emergency Situations
Prepaid cards are particularly useful for emergency situations that require immediate action from the government. With a prepaid card program, governments can disburse payments to affected residents immediately in cases of a disaster, such as the forest fire in Salve Lake, Alberta.
It’s no surprise that government agencies are more frequently considering prepaid programs as a preferred method of payment. Prepaid card programs are customizable to accommodate whatever payment program a particular department or agency is launching. These programs are cost-effective, efficient, flexible to use, and the benefits far outweigh those of traditional payment methods such as paper cheques.