The high stakes of government payment inefficiencies

How outdated payment systems are leaving Americans vulnerable to fraud and lost funds

Every day, Americans throughout the country depend on financial transactions from government agencies for fast, secure payments tied to payroll, pension, insurance payments, unemployment benefits, tax refunds, and much more. Agency leaders responsible for disbursing these funds must manage the security and efficiency of payments while reducing operational costs. But for many agencies - and those who depend on them - traditional methods of payments, particularly paper checks, are fraught with inefficiencies, high costs and security risks.

Industry challenges in government disbursements

In our experience in helping organizations solve complicated payment processes, government agencies encounter common challenges when disbursing payments: especially the high costs and resource-intensive nature of printing, mailing and processing checks. Similarly, security risks arise as checks can be lost, stolen or subject to fraud, compromising the security of disbursements. The manual processing of checks can lead to delays, errors and increased administrative workloads. As a result, constituents are inconvenienced by delays in accessing funds, high check-cashing fees, and the risk of undelivered or lost checks, ultimately leading to poor satisfaction in public services.

The power of open-loop debit cards

Currently, some state governments use open-loop general-purpose debit cards only for some disbursements, such as unemployment insurance benefits and child support payments. An open-loop prepaid card displays a network logo, such as Visa, MasterCard, American Express, or Discover. These cards are accepted at any merchant, ATM or bank that supports that card network.

Open-loop cards are underutilized by government agencies today since many are still utilizing checks as their primary form of payment to their constituents. Government debit card programs are generally provided at no cost to the agency when minimum volumes are met. In addition, there is substantial opportunity for agencies to expand the use of debit cards for other payment types such as foster care, adoption assistance, workers' compensation, paid family leave and guaranteed income programs. By offering debit cards for a broader range of disbursements, agencies can realize additional cost savings and efficiencies. This approach is particularly beneficial for unbanked and underbanked families who lack access to mainstream financial services.

Lowering costs and improving efficiency

The Conduent Way2Go Card® is a versatile government debit card solution that streamlines the disbursement process while offering numerous benefits for both agencies and recipients. This solution is configured at the program level to support a wide range of agency requirements, making it a powerful tool for modernizing government payments.

Our solution offers a paperless payment method in three forms, each designed to meet different agency needs:

1. Recurring payments: Ideal for ongoing disbursements, such as retirement benefits, court-ordered payments, government benefits, or payroll. The Way2Go Card® ensures efficient and secure disbursement on a weekly, biweekly, or monthly basis.
2. One-time payments: Suitable for infrequent or irregular payments, such as tax refunds, rebates, lottery winnings, or unclaimed property payments. The Way2Go Card provides reliable, secure delivery of funds.
3. Instant issue payments: Perfect for on-site disbursements, such as juror payments, insurance claims, prison release funds, terminated employee payments, and rebate programs. Instant issue allows agencies to offer immediate access to funds, with cardholders needing only to activate their card to unlock its full potential.

For agency leaders, change lies in balancing the need for secure and efficient payment processes with the imperative to minimize operational costs. Ensuring that recipients receive their funds promptly and without hassle is a critical aspect of their responsibilities, highlighting the importance of modernizing and optimizing government disbursement systems.

Ready to discover how Conduent Government Solutions can help your agency innovate and improve government payment programs? Visit us online now to learn more.

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