The Commonwealth of Virginia has started using prepaid cards to help get money into the hands of the people of who needed them. One reason was cost savings, savings of up to .60 cents an item, a typical direct expense on payment mechanisms.
Challenges faced:
Looking for solutions to move from paper:
Went to payroll started a pilot program there
Presented the business case to start the programs, lots of benefits from a benefits standpoint but the challenges involved getting the resources needed.
What are the benefits for cardholders?
Single parent households can buy school supplies or clothes via the internet. Senior citizens with mobility issues can order groceries or prescription medicines via the web. Might other be dependent on others for such things.
Homeless could purchase a hotel room for the night.
Unemployed might buy a suit.
Child support - separate accounts.
Prepaid cards improve people’s lives.
There has been an acceptance increase because of the unfortunate state of the economy, more people in need now than before.
Elements of best practices for cardholders and agency?
Insurance, protection, safety and convenience, ease of disputing purchases, pay bills, web purchases, balances, help manage money, lower fees. There is a deed for education and engagement. Clear, simple directions for consumers.
What challenges does an organization face selling prepaid card programs to the public sector?
Market competition is fierce, lots of very skilled players
Synchronicity between state, treasury and agency.
Durbin Bill Impact:
Macro level – law of the land even if you are uncomfortable with it.
Is the exemption meaningful?
Innovations for the future?
Single use card for tax returns, financial savings programs - beneficial for public sector
New agencies – collaboration of agencies
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