Jodie Kelly, the CEO of the Electronic Transactions Association (ETA), went before the House Financial Services Task Force on Financial Technology last week to testify about the way the modern payments industry has helped the United States government deliver stimulus money to people during the COVID-19 pandemic.
Due to various physical distancing and lockdown measure put in place due to COVID-19, many businesses have required relief from the government in order to prevent massive layoffs. Additionally, with many more people staying home, the importance of secure access to financial services and digital payment solutions has increased as well.
“The unprecedented challenges caused by the pandemic have appropriately caused policymakers not only to move quickly to address the immediate crisis but also to ask how we can position ourselves to do even better in the future [and] that is a particularly important question when it comes to those who are most vulnerable,” Kelley said. “When the CARES Act became law and state and federal policymakers began to look for ways to get stimulus money to consumers and businesses as quickly and securely as possible, ETA members immediately offered the tools of the modern payments industry to help to deliver stimulus money to Americans,” she added.
The ETA is a global trade association that represents over 500 payments and technology companies, and its members are responsible for the processing of over $21 trillion in purchases worldwide.
The government has used a number of different forms of digital payments thus far to distribute money to people across the country. So far over $9 billion in Economic Impact Payments (EIP) have been delivered to 5.7 million Americans by reloadable prepaid cards, which can be transferred to a bank account and used online, and are accepted anywhere VISA is accepted.
These prepaid cards are a particularly useful way to receive assistance payments for those without a bank account, a segment of the population that is also often the most vulnerable.
Digital payments products are being deployed today to assist with the delivery of the (as of June 6) $266.8 billion in EIP and $511 billion in PPP, along with the $260 billion in unemployment insurance allocated under the CARES Act.
In addition to prepaid cards, hundreds of thousands of Americans have received stimulus money via a peer-to-peer (P2P) service such as Venmo or PayPal, and many ETA member companies have used modern digital payment tools to help distribute $659 billion in Paycheck Protection Plan loans to the Small Business Association, which were then disbursed to over 4.5 million business.
Finally, Kelley discussed the growth of the contactless payment market — VISA says it saw a 150% increase this year in its use — thanks to such technologies’ ability to let consumers pay for goods without having to come into contact with any surfaces other their own cards or smartphone. She also noted that any stimulus money that was distributed via prepaid card or to any bank account that is linked to a digital wallet benefits from the added security of biometric authentication common among most digital payment services.
“ETA members are already working on the next generation of digital payment tools and services,” stated Kelley. “We are keenly mindful of how important that is, and proud that we are successfully helping to address this critical need.”
June 15, 2020 – by Tony Bitzionis