Visa Confidential1 Concurrent Session #5: Benefits of achieving paperless pay processes Jill Goebel Senior Business Leader Visa U.S.A. August 17, 2009

1Visa Confidential

Concurrent Session #5: Benefits of achieving paperless pay processes

Jill GoebelSenior Business LeaderVisa U.S.A.August 17, 2009

22009 NASACT Conference Visa Confidential

Agenda

• Current Landscape

• Existing Prepaid Programs & Benefits– Government Disbursements

– Private Sector Payroll


Industry Landscape

• Growth of electronic payment continues– 63% of all consumer payments will be done electronically this year

– Consumer check payments have declined from 18% to 8% since 1999

– Cash payments have declined from 39% to 29%

• Prepaid cards have played a significant role in this shift– Wages

– Benefit Payments (Child Support, Unemployment Insurance, Workers Compensation, Tax Refunds, Social Security, etc.)

– Incentive/Rebates

• Trend will continue– Cost savings and efficiency for businesses and government

agencies

– Economic downturn

– Growing consumer awareness and preference Source: Digital Transactions – November 2008


State Programs

AK

HI

OH

WA

CAVA

MI

GA

KS

IA PA

WV DE

MS

ORSD

MO

WI

MN

KY

SC

FL

NC

UT

AZ

ND

NM OKTN

NEWY

LA

IL IN

AR

VT

NY

CO

AL

MT

ID

NV

TX

Programs utilizing a Visa prepaid card Child Support, Unemployment Insurance, Workers Compensation and TANF disbursements

Child support Unemployment only Child support & Unemployment Combining different services

Child support Unemployment TANF

Unemployment Workers Comp

MD

ME

NJ

DC

Child support Unemployment Workers Comp

MARI

CT

NH

Source: State agencies websites

37 states /64 programs


In the News

It’s In The Cards – Providence Journal – 01/26/07*

Rhode Island is the first state in New England and the ninth nationwide to adopt a payment-card system for unemployment insurance, said State Department of Labor and Training’s director, Adelita Orefice . The payment cards are more reliable than paper checks, she said, because paper checks can get lost or stolen and, if disaster hits, they may never make it into the recipient’s mailbox.

“We process over 600,000 checks a year,” Orefice said at a news conference. But as was demonstrated during the hurricane in Louisiana, she said, ‘these checks are useless in a disaster.”

* http://www.projo.com/business/content/BZ_CHECKFREE26_01-26-07_D6440SH.d5c21a.html

“Having the debit system along with direct deposit of child support funds into a parent’s bank account has saved the attorney general’s office $6 million since 2005 due to added efficiency and less paperwork…” – Janece Rolfe, public information officer for the Texas attorney general’s child support division

Debit Card Program Appeals to Thousands – The Facts.com – 02/08/07


In the News cont…

AG Improves Access To Child Support Payments In Oregon – 12/20/06* The State will require use of Direct Deposit or the U.S. Bank ReliaCard Visa to reduce costs and increase convenience for families

“Today, Attorney General Hardy Myers announced that the state’s Child Support Program will require customers to receive payments through electronic means, eliminating the necessity of mailing paper checks. By using the state’s Direct Deposit program or the U.S. Bank ReliaCard, the state is able to save significant printing and mailing costs while providing families safe, convenient access to their money.”

Texas AG Greg Abbott Announces New Way To Receive Child Support – 10/16/06** Texas Debit Card gives Metroplex parents alternative to getting checks in the mail

“As we’ve said before, this is a win-win situation for both recipients and taxpayers,” said Andrew Penca, Commissioner of the Department of Workforce Development. “Recipients will receive their benefits in a more timely fashion, and easily have access to their funds at banks, ATM machines, or at thousands of merchants throughout the state. In addition, the state will save approximately $1.8 million per year by discontinuing the printing and mailing of weekly unemployment checks.”

** http://www.doj.state.or.us/releases/2006/rel122006.shtml * http://www.oag.state.tx.us/oagnews/release.php?id=1792


In the News cont…

• South Carolina’s employment commission will move to an electronic disbursement program in 2009. The commission currently spends approximately 50 cents to print and mail each check, which could cost the agency more than $3 million a year. (“Check is not in the mail; Jobless pay headed to cards, direct deposit,” The State: February 23, 2009)

• Alaska hopes for thirty percent adoption of unemployment benefits disbursed on

a prepaid debit card over six months. The program will help to phase out paper checks that state officials say are costly to print. (“Unemployed to get debit cards in Alaska,” Associated Press: February 21, 2009)

• Idaho estimates it will save $250,000 annually by using prepaid cards to disburse child support funds. (“Chase Visa Cards in Idaho Program,” American Banker: January 27, 2009)

• Maryland expects to save $400,000 annually in postage, paper, staff time and other processing costs by switching to prepaid debit cards to disburse unemployment insurance benefits. Approximately 52,000 people in Maryland receive unemployment benefits. (“Debit in, checks out: Unemployment benefits to be disbursed on cards,” The Baltimore Sun, December 1, 2008)

• Michigan estimates saving approximately $1.6 million annually in printing and postage by going fully electronic. The state also estimates it will save 50 cents per participant with cards vs. checks for its child support program (4th largest in country). Each check costs Michigan 86 cents to distribute vs. 36 cents per card. (“State goes electronic with unemployment benefits,” The Grand Rapid Press September 26, 2008 and Mark Jasonowicz, deputy director of the state's child-support program, presentation at 2006 Prepaid Forum)


In the News cont…

• New Mexico estimates it could save $6 million annually if all of the 27,000 parents currently receiving checks opt to receive their child support payment on a prepaid card. (Hundreds of New Mexico Custodial Parents Opting for the New Prepaid Debit Cards, press release: May 10, 2007)

• Rhode Island estimates saving $500,000 annually in check printing and processing costs for its unemployment program. (Unemployment checks going to paperless system, The Providence Journal: March 27, 2007)

• Indiana expects to save $1.8 million annually for its unemployment program ($1.1 million in reduced postage; $700,000 in administrative reductions). (State to Offer Benefits on Debit Cards, Springfield Journal Register: December 28, 2006)

• Ohio estimates it will save nearly $2 million annually by switching to prepaid cards for unemployment recipients. (State to Issue Unemployment Debit Cards, News Channel 15: August 9, 2006)

• West Virginia has saved over $500,000 annually by using prepaid cards to disburse child support funds. (BofA California Dreamin', ATM & Debit News: June 22, 2006)

• Minnesota estimates it could save more than $1 million annually due to the implementation of the prepaid cards. The latest state report from 2006, found that more than $680 million in unemployment benefits were paid to over 175,000 Minnesotans, $25 million more than in 2005. (The 2006 Report: Unemployment Insurance Minnesota)


Private Sector Payroll Card Programs

• UPS

• McDonald’s*

• Brinker (Chili’s, etc)

• Harrah’s

• YUM (Pizza Hut, KFC, etc.)

• Darden Restaurants

• Best Buy

• Marriott

• Dillard’s

• Waste Management

• Williams Sonoma

• CKE Restaurants (Carl Jr’s)

• Ross Dress for Less

• Sysco

• Dollar Tree

• Family Dollar

• Aramark

• Stein Mart

• Charming Shoppes

• Kohl’s

• Kelly Services

• Safeway

• Jack in the Box

* Participating Franchise Locations


AK

HI

OH

WA

CAVA

MI

GA

KS

IA PA

WVDE

MS

ORSD

MO

WI

MN

KY

SC

FL

NC

UT

AZ

ND

NM OK

TN

NE

WY

LA

IL IN

AR

VT

NY

CO

AL

MT

ID

NV

TX

MD

ME

NJ

DC

MARI

CT

NH

Paperless Pay Map*“Green” states permit Paperless Pay

“Yellow” states have some restrictions on Paperless Pay

“White” states don’t permit Paperless Pay

Paperless Pay enables employers to achieve 100% electronic disbursement of wages through direct deposit and payroll cards.

* Legal analysis provided by C. Beyda, attorney, Margolis & Tisman LLP

Documents

Visa Confidential1 Concurrent Session #5: Benefits of achieving paperless pay processes Jill Goebel Senior Business Leader Visa U.S.A. August 17, 2009