Unleashing electronic payments
The US has been slower to embrace electronic payment systems than other developed countries. Only a quarter of non-cash payments in the country is conducted electronically, compared to 70% in Europe and 75% in Japan. This preference for paper-based transactions over more efficient electronic payments carries a substantial financial penalty. A check transaction can be 50% to 100% more expensive than an electronic transaction, implying that the total cost of the American payment system, which is equal to about 3% of GDP, can be substantially reduced by going electronic. The US can overcome its fixation on the paper check if government and the financial industry work together to formulate and implement specific reforms to accelerate the shift to electronic payments.
Publication Name: Banking Strategies
Evolution of electronic payments and collections in the U.S. government
The Financial Management Service is the division within the Treasury Department responsible for federal government accounting, cash management, and payments and receipts on accounts. The division manages a $7 billion cash flow each day. In 1986, the Treasury Department, as a whole, paid 250 million of its 700 million payments through electronic transfers. Of the electronic funds transfers (EFT) most took the form of direct deposits to accounts. One of the EFT systems used by the Financial Management Service is known as the Treasury Financial Communication System, a transaction-based, on-line, real-time system capable of handling large dollar volumes.
Publication Name: Journal of Bank Research
Canadian Auditor General Denis Desautels included recommendations on improving the federal government's accounting practices in his 1995 budget plan. Although most of his recommendations have received strong criticisms from top government officials, Desautels remained confident that these will eventually be taken up by the government. He noted that Canada's current fiscal problems, particularly its debt crisis, will force government officials to consider his recommendations.
Publication Name: CA Magazine
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