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Beyond the Transaction: Every Transaction Has a Story
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Government Prepaid Programs Deliver Unexpected Benefits

Have you ever thought about how powerful unintended consequences can be?  I have—especially the unexpected benefits they can bring, like when a medication meant to treat one disease also improves other conditions.

More specifically—and because I work on public sector programs in the U.S. at MasterCard—I’m thinking about financial inclusion.

Governments at all levels—federal, state, and local—have embraced electronic payments to drive efficiency and save money.  And while many governments moved toward all-electronic benefit disbursement for the cost savings, it quickly became clear that the prepaid card solutions that enable that migration can also drive financial inclusion.

Take our partnership with Comerica Bank and the U.S. Treasury Department on the Direct Express®  program, for example.  While Treasury’s initial goal was to save taxpayer dollars, the program also provides access to the financial mainstream for the approximately 80 percent of program participants who are unbanked.  Receiving their funds on a prepaid card means they no longer have to pay check cashing fees and can more easily pay utility bills and shop online.  And we have gone beyond inclusion to drive financial capability through Direct Express, as well.

Based on the success of programs like Direct Express, local and state governments are turning to prepaid programs not just for cost savings, but to take advantage of the inclusion benefits they offer. For example, last year the city of Oakland, California unveiled a city government ID card with an optional prepaid debit card feature designed to provide its residents access to financial services.

The program in Oakland mirrors what MasterCard is doing in partnership with governments in other parts of the world to promote financial inclusion.  Because what was once just an unexpected benefit is now a priority for governments everywhere.

Shopkeeper Using Credit Card Machine