Report Shows Benefits for State Governments' Use Electronic Payments

The Electronic Payments Coalition (EPC) today welcomed a newly released report by the Council of State Governments, "Acceptance and Use of Electronic Payments for State Taxes and Fees," which details the tremendous value that state governments receive from using electronic payment technology. The EPC pointed to the recent report, noting that state governments are increasing their use of the payment method to collect everything from state taxes to driver licenses’ fees.

"This report underscores the tremendous value of electronic payments for all parties involved," said Peter Madigan, Executive Director of the Electronic Payments Coalition. "In this case, consumers are using payment cards to pay taxes and other state fees online because it’s safe, quick, and convenient. And states are eager to accept these types of payments because it cuts down on their administrative costs and improves payment efficiencies."

The report reflects the findings of a nationwide study of current state policies and practices regarding electronic tax and fee payments. Thirty-seven states responded to survey questions. The report, initiated in October 2006 and completed in March 2007 highlights the benefits of accepting credit and debit card payments for government taxes and fees. Some of these benefits include:

• Reduced processing costs associated with cash and check payments;
• Reduced transaction processing time and costs;
• Improved payment verification and auditing through real-time authorization and verification;
• Reduced accounts receivables and payment delinquencies, and fewer need for debt collection activities; and
• Improved fund availability by reducing check float and enhancing cash flow.

"This mutual benefit derived by both sides of the equation is driving greater use of electronic payment card technology by state governments," Madigan added. "This trend can and should continue, and it will so long as the competitive electronic payment industry grows, unfettered, providing newer and more efficient products and services for governments and taxpayers alike."