Prepaid card programs are fast becoming a popular choice for government agencies for its numerous benefits and use cases.
Tailor made for government initiatives, prepaid programs are cost-effective, efficient and flexible for the organisation and consumers. The benefits of using prepaid cards far outweigh traditional payment methods, such as cash and cheque payments.
There are many prepaid card applications for government initiatives, such as:
- Emergency assistance and disaster relief
- Welfare assistance and disability benefits
- Veteran’s benefits
- Child support benefits
- Pensions and unemployment benefits
- Reimbursements to emergency services volunteers and carers
- Public transport cards
- Payroll and expense management
In a paper by Deloitte Access Economics (Efficient and Modern Payments, 2012), it was revealed that switching from archaic payment methods such as cheques to prepaid programs for select government payments can provide annual gains in excess of $240 million for Australian consumers and governments.
Efficient, timely delivery
Prepaid programs enable government agencies to reduce administrative costs and operate more efficiently. Prepaid cards are estimated to save five minutes in administration time per cash payment, which equates to around $67 million saved in labour costs. Another added advantage is that for recipients of multiple benefits, government agencies can process multiple disbursements onto a single card.
Recipients also save time by not having to cash in cheque payments or filing for reimbursements. In particular, emergency services volunteers, carers and anyone who regularly claims expenses can avoid this cumbersome process and paying out-of-pocket.
Convenient for cardholders
Prepaid cards can be used much like debit cards for day to day activities, such as making purchases in-store, withdrawing cash, transferring funds to another account and of course, receiving payments from employers and the government. A Prepaid Visa Card allows cardholders to use the card anywhere in the world where Visa is accepted, including online purchases.
Prepaid cards are particularly useful for recipients who are unbanked or account details otherwise unknown.
Prepaid cards are secure and lowers the risks of online fraud as they are not connected to bank accounts. Cardholders’ funds are protected and cards replaced in the case of theft or loss.
Transparency in reporting
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.
Speed of distribution in emergency situations
Prepaid cards are a preferred choice in emergency situations that require immediate response from the government to make time-sensitive payments. With a prepaid card program, payments can be disbursed to affected people immediately.