New study finds card payments cheaper than cash & acceptance enhances operational efficiency, reduces administrative costs, and lessens theft risks.
EPC’s Hunt: “The sponsors and supporters of the Durbin-Marshall government mandates apparently were more excited about sending press releases requesting the report than they were its findings.”
WASHINGTON, DC — The Government Accountability Office late last week publicly released a report requested by Senator Dick Durbin (D-IL) and Congressman Lance Gooden (R-TX) about the government’s use and acceptance of credit cards in November 2023. Durbin and Gooden were both sponsors of the Durbin-Marshall Credit Card Bill and requested the report of part of a government-wide retribution tour against companies opposed to their flawed mandates. Sen. Durbin also requested a hearing from the Consumer Financial Protection Bureau and the Department of Transportation.
Like numerous reports before it, the GAO found acceptance of card payments:
- Reduced administrative burdens;
- Increased efficiency;
- Enhanced customer convenience;
- Mitigated theft risks associated with cash;
- Provided nearly $500 million in rebates; and
- Allowed immediate verification of transactions instead of waiting for checks to clear or cash to be deposited.
In total, credit and debit card transactions enabled $43 billion in payments and netted nearly $500 million in rebates to the government during 2023, the year the report covered. The GAO reported government entities collectively conducted about 750 million transactions in 2023 and the processing cost for those transactions amounted to less than 2%.
“The independent GAO report once again proves what numerous previous other reports and 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. “The sponsors and supporters of the Durbin-Marshall government mandates apparently were more excited about sending press releases requesting the report than they were its findings.”
“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 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 GAO study also noted of the “more than 85 federal entities collected over $43 billion from consumers who used credit, debit, or other payment cards for goods, services, and other payments” … processing costs “amounted to 1.8 percent of revenue (which falls within the range of published industry estimates for U.S. merchants).”
The full report is available here.