June 15, 2010 – The U.S. Department of Treasury announced this week plans to switch to electronic payments, eliminating about 136 million paper checks, saving almost $50 million in postage costs and saving U.S. taxpayers about $300 million over the first five years and more beyond. Some states have realized savings that have reduced the cost of distributing benefits dramatically. Nebraska, for example, used to pay 59 cents to print and mail each check, but pays only about a penny to reload a prepaid card.
Digital currency has the potential to dramatically transform government payments in the next five years, saving U.S. taxpayers hundreds of millions of dollars in the process, according to representatives from the government and private sector.
The positive impact of digital currency on all aspects of government payments and purchasing was highlighted at a briefing in Washington, D.C. today hosted by THE HILL, the widely-read congressional newspaper, and sponsored by Visa. Speakers at the event, including Douglas Michelman, global head of Corporate Relations at Visa Inc., pointed to plans by state, local and federal government agencies to launch or expand electronic payment programs to improve efficiency, accountability and transparency.
„We all know that governments at every level are struggling with their budgets in these tough economic times, and achieving savings, improved accountability and transparency are even more urgent,” said Michelman. „Switching from inefficient paper processes to digital currency can have a sizable long-term impact in terms of real dollars and cents.”
Among the expected future savings cited at the event:
„It is encouraging that government agencies of all sizes are embracing digital currency as a way to deliver immediate and lasting benefits to U.S. taxpayers,” continued Michelman. „The benefits of electronic payments don’t just hit the bottom line: cardholders, particularly the financially underserved, benefit from lower check cashing fees and an empowering financial tool that can be used at millions of merchant locations and ATMs.”
The government savings derived from shifting from paper to electronic payments echo the findings of a recent study authored by Moody’s Economy.com Chief Economist Mark Zandi. It concluded that the migration from paper to electronic payments – specifically debit and credit card usage – contributed $1.1 trillion to the global economy from 2003 through 2008. That represents on average a 0.5 percent increase in global GDP.
„Cards grease the economic engine, making transactions run more smoothly and creating efficiencies in commerce,” according to the report. „The results demonstrate that the migration from paper to electronic payments is a positive phenomenon, and the study supports the adoption of policies that encourage and accelerate this shift.”
Source: Visa Inc.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
