Magazine article American Banker

Forum on Benefits Transfer Started; Industry-Government Panel to Discuss Systems, Costs

Magazine article American Banker

Forum on Benefits Transfer Started; Industry-Government Panel to Discuss Systems, Costs

Article excerpt

Forum on Benefits Transfer Started

Industry-Government Panel to Discuss Systems, Costs

The Electronic Funds Transfer Association has created a forum to discuss what electronic distribution of such government benefits as food stamps and welfare would cost and how it would affect payment system.

The Herndon, Va.-based interest group announced this month the formation of the the Electronic Benefits Transfer Exchange, a 47-member discussion group of bankers, technology vendors, and government officials.

Members of the group will gather in Washington four times next year to discuss problems and identify opportunities that would stem from a nationwide system of electronic payment of government benefits.

Goal Is to Reduce Losses

The U.S. government has long been a supporter of electronic benefits transfer. The Department of Agriculture hopes something like the direct-deposit system most banks offer could reduce the waste and fraud associated with distributing food stamps. Other agencies have similar hopes. Retailers like the idea because it would it provide prompt payment.

It is not as clear what financial institutions would gain. It comes as little surprise, then, that the banking industry does not seem eager to participate.

Part of the goal of the Electronic Funds Transfer Association's forum is to address the problems a bank would encounter of converting automated teller machines and other electronic banking tools to deliver government benefits.

Industry officials said such a forum can go a long way toward encouraging bankers to get involved in electronic benefits transfer. …

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