In case you just woke up from a decades-long sleep, most of the economy now relies on moving money electronically. I guess someone had to tell Congress.
Last week Jodie Kelly from the Electronic Transaction Association testified before the House Financial Services Task Force on Financial Technology to tell our elected officials how electronic transactions were used to deliver billions of dollars to consumers and businesses affected by the COVID-19 pandemic.
According to an article in FindBiometrics, ETA CEO Testifies On Benefits of Modern Payments Tech During COVID-19, Kelly told the task force about the benefits provided by the association members:
The government has used a number of different forms of digital payments thus far to distribute money to people across the country. So far over $9 billion in Economic Impact Payments (EIP) have been delivered to 5.7 million Americans by reloadable prepaid cards, which can be transferred to a bank account and used online, and are accepted anywhere VISA is accepted.
These prepaid cards are a particularly useful way to receive assistance payments for those without a bank account, a segment of the population that is also often the most vulnerable.Digital payments products are being deployed today to assist with the delivery of the (as of June 6) $266.8 billion in EIP and $511 billion in PPP, along with the $260 billion in unemployment insurance allocated under the CARES Act.
She went on to talk about the money that was electronically transmitted to consumers through P2P services like Pay Pal and Venmo (same company). She also added that much of the PPP loans were delivered to small businesses electronically.
Almost as an aside, the article goes on to mention that Visa had reported a 150% increase in contactless payments. Wow, 150% is a huge increase. Unfortunately, there was a not a lot of data to back up that huge increase and it led me to ask myself several questions:
- Is that increase U.S. only?
- Does it include mobile wallets or simply contactless card? My EIP card doesn’t appear to be contactless enabled, by the way.
- How much of that increase is from new users versus existing users using contactless more frequently?
- What is the level of repeat usage?
Maybe it’s just me. In all honesty, the House Financial Services Task Force on Financial Technology probably doesn’t even care about this stuff and it’s probably not the right forum for this type of information anyway.
Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group