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The Move to Digital Payment: When the Check Is No Longer in the Mail

Hanns Kuttner

Digital payment shows how productivity can grow in the public sector. Making a payment digitally costs less than a paper check. Those who receive a monthly benefit payment, most often from Social Security, make up the largest number of payments the federal government makes by paper check. Direct deposit has been an alternative to paper checks for 35 years. Not everyone has a bank account, limiting the potential for direct deposit. A newer form of digital payment, a prepaid debit card, will allow digital payment to replace the monthly paper check. Millions of recipients will now go digital in 2013, implementing a change Congress called for in 1996. Those who do not choose a digital payment type will be enrolled as prepaid card users.

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