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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
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.