APEX Panel: Cardholder Satisfaction Up on Gov’t Prepaid Cards; Data Analytics Key (March 6, 2014)
Government agencies using prepaid cards to deliver benefits are seeing solid user satisfaction and improving efficiencies as such programs evolve, amid an environment of pending regulatory changes and heavy scrutiny by consumer advocates, according to a panel of experts convened at the All Payments Expo (APEX) in Las Vegas this week. A point of discussion during the March 4 panel was the fact that JPMorgan Chase & Co. in January of this year announced plans to exit the business of corporate and public prepaid cards as all players face uncertainty about the future direction of prepaid card regulations. The CFPB in May or June is expected to release its proposed rules for GPR cards.
But panelists from U.S. Bank, FIS and Visa said prepaid card programs driving significant cost saving and efficiency from government agencies have a strong future. “We see why it makes sense to continue supporting prepaid cards for federal, state and municipal agencies, even within the current regulatory environment,” Kevin Morrison, U.S. Bank’s senior vice president and manager of prepaid business, told APEX attendees. U.S. Bank supports distribution of benefits to the public through 34 open-loop prepaid card programs in 17 states, Morrison noted.
U.S. Bank recently won a bid to deliver unemployment insurance benefits in Colorado, where 60 percent of recipients opt to receive funds through a prepaid card and 40 percent opt for direct deposit, according to Cher Haavind, director of government, policy and public relations for Colorado’s Department of Labor and Employment. “We’ve negotiated the prepaid card fee structure down to where we are striking a good balance between providing benefits and trying to minimize fees to recipients,” she said.
FIS, which supports 17 closed-loop prepaid card programs to government agencies, also sees improved cardholder usage and satisfaction from its operations, according to Brian Dugan, FIS vice president and general manager of EBT for FIS Government Solutions. Improving technologies using data to manage prepaid card programs for government benefits is driving better efficiency, as well. “Agencies delivering these benefits are accountable and [new] data analytics are really helping improve security and reduce fraud,” he said.
“Incremental new features and tools are steadily improving the prepaid cardholder’s experience,” said Steven Evans, Visa’s senior director, government prepaid products. He tells Paybefore the majority of active prepaid cardholders who receive government benefits reported strong satisfaction with the programs, according to a 2012 Visa study among recipients of child support and unemployment benefits. Since then, Evans told attendees, trends have continued in a positive direction.
