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ATM Fees and Management Costs Drive Government Prepaid Card Costs:

PaymentsJournal by PaymentsJournal
March 24, 2021
in ATM, Prepaid, Truth In Data
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Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint:  Government Issued Prepaid Cards: Efficient Cash Access and Distribution. 

ATM Fees and Management Costs Drive Government Prepaid Card Costs:

  • In 2019, ATM Fees accounted for $97.37 million of an overall $152.69 million in program costs.
  • The second largest government issued prepaid cost was ‘account servicing,’ totaling $33.3 million in costs.
  • Customer service inquiries accounted for $12.36 million of a total $152.69 million in program costs. 
  • The last substantial driver of costs for government issued prepaid cards (2019) was ‘purchase transactions’, which cost $5.9 million.
  • Payment card costs are very low at 1.12% (2019), and few cost categories can benefit from further optimization. 
  • ATM fees are kept to a minimum if the customer stays within a limit or network

About Report

Prepaid cards played a significant role in distributing CARES Act funds to 3.6 million Americans, but the payment form extends deep into many government benefit programs.

Ten benefit programs carried $136.2 billion in prepaid loads during 2019, but only incurred $152.7 million in costs among all government distribution channels. For those in need, prepaid cards provide quick access to funds and a reliable, safe way to receive cash value.

Tags: ATMfederal governmentFeesPrepaidPrepaid cardsTruth In Data
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