Electronic Payments Could Catch on in Government
Dwolla, which handles secure financial transactions, is migrating to the public sector. Iowa Gov. Terry E. Branstad announced earlier this year that the state would implement Dwolla’s online and mobile payment system for the Iowa state government. The first project with the Iowa Department of Revenue will give businesses the option of paying via Dwolla. Branstad says the electronic option is less costly and safer than mailing and processing a paper check, and the efficiency of the system means participating businesses will receive their tax stamps more quickly. One Iowa school district already uses Dwolla to allow parents to make online payments to a child’s lunch money account, eliminating high transaction fees for schools. If an agency were to make $10 million in payments via credit card with an average transaction of $40, for example, the agency would likely see 2 percent to 5 percent in fees totaling $200,000 to $500,000. That same amount would cost $62,500 with Dwolla, which charges customers 25 cents per transaction above $10 and nothing for transactions of $10 or less.
From “New Electronic Payment System Could Catch On in Government”
Government Computer News (03/14/13) Crowe, Greg