GAO Report: Credit Cards Help Lower Costs for Government, Ease Payments

New study finds card payments cheaper than cash & acceptance enhances operational efficiency, reduces administrative costs, lessens theft risks

WASHINGTON, DC — The Government Accountability Office today publicly released a report on the benefits credit and debit cards offer government agencies. The GAO found credit and debit card transactions enabled $43 billion in payments and netted nearly $500 million in rebates to the government. Additionally, the report found the acceptance of card payments reduced administrative burdens associated with collections.

“The GAO report just proves what small businesses across the country have long known: Credit and debit card payments are efficient, safe, secure and less costly and burdensome than handling cash payments,” said Electronic Payments Coalition Executive Chairman Richard Hunt.

“Why a few politicians in D.C. would side with corporate mega-stores to threaten these benefits with new mandates like the Durbin-Marshall bill is a stark reminder that bad ideas never die in Washington.”

The GAO found government entities collectively conducted about 750 million transactions in 2023, the year studied, and the processing cost for those transactions amounted to less than 2%. Further, those transactions, according to the GAO, enhanced customer convenience and allowed the government to verify transactions immediately instead of waiting for checks to clear or cash to be deposited.

The GAO also noted the National Park Service’s move to cashless payments at select parks resulted in a net savings because of the costs associated with processing cash which, according to industry studies, can range from more than 4% to 15%, significantly higher than card processing. The Post Office noted the mitigation of theft risks associated with cash handling thanks to a greater shift to card payments.

Finally, the GAO reported federal officials said card acceptance enhanced operational efficiency and reduced administrative costs.

The full report is available here.