Nov 30, 2022

Payments for Good Prepaid Cards are Changing Government Disbursements (for Good)

Traditionally, government disbursements and emergency payments take the form of a paper check. Prepaid cards, like those offered through the Blackhawk Network (BHN) Payments for Good program, are now accelerating these federal economic impact payments (EIP), as proven through recent and widespread COVID-19 relief aid.

Prepaid cards are simply faster, more secure and more cost-effective than paper checks, all of which benefit both the government agencies and the recipients. They’re also especially useful for the unbanked and underbanked, roughly 19% of U.S. households, as it saves them from having to deal with alternative financial services such as check cashing services, money orders and payday loans. According to the Report on the Economic Well-Being of U.S. Households, in 2018, 40% of unbanked adults used these types of services.

In a recent podcast, BHN Senior Business Development Manager Helen Brune, BHN Director of Payments for Good Partnership Development Tyler Gentry, and Mercator Advisory Group Director of Prepaid Advisory Service Jordan Hirschfield discussed how prepaid cards facilitate the disbursement of funds for agencies and give recipients the flexibility and security to receive and use these funds quickly and easily.

More Reasons for Rapid Prepaid Card Adoption

The role of BHN’s Payments for Good is to help state and local government agencies-and nonprofit organizations-update their disbursement process by replacing paper checks with prepaid cards. Prepaid cards are more cost-efficient, faster to send and use, and provide more security than checks.

“The pandemic really accelerated the adoption of cards by government agencies because they had an unprecedented number of COVID-related payments to send out,” said Brune. “They lacked the administrative staff and technology to do it in an efficient manner with checks.”

One of the many advantages of using prepaid cards is the added flexibility to pay bills and purchase essentials, either online or in person. Prepaid cards also offer unique cardholder protections.

“One of the biggest takeaways we got from getting though the pandemic was the ability of businesses, government and consumers to quickly adapt and accept cards as a secure and desired payment mechanism because they have wide acceptance,” said Hirschfield. “They are instantly available and there is back-end security.”

The savings for agencies using prepaid can be substantial, often reducing administrative costs by 10% to 20% compared to paper checks. Prepaid cards are also faster; if an organization chooses to distribute payments via virtual cards, they can be delivered instantly. If the agency desires, prepaid cards can also be programmed to only be used in certain businesses and industries.

Prepaid Cards Combat Fraud, Too

As previously mentioned, prepaid cards offer security benefits for both agencies and recipients. For government agencies, all spend data can be used to analyze and optimize their program’s influence, providing an unprecedented level of transparency, as well as accountability. Recipients get their funds digitally-quickly and securely-so they don’t have to worry about receiving funds via mail. Cardholders also benefit from protection against lost or stolen cards. With BHN Cardholder Support, recipients have easy access to all the assistance they need. Of course, funds are also covered by the Federal Deposit Insurance Corporation (FDIC).

“Security continues to be an issue with consumers,” said Hirschfield, “Mercator has research that highlights that fraud and theft is a large concern across all payment mechanisms, especially within prepaid mechanisms. 55% of consumers were satisfied with a resolution with prepaid fraud or theft incident. People in a compromised position need to know they have the protections, as well as a greater opportunity for a positive resolution.”

Payments For Good and Mobilization of Aid

To date, Blackhawk Network and Payments for Good have assisted in the disbursement of $3 billion in state government and local nonprofit payments to individuals. Here are two use cases:

In March of 2021, BHN joined forces with CORE (Children of Restaurant Employees), a nonprofit organization that offers support for families in the restaurant industry who faced financial hardship due to injury or death. Together, they provided prepaid cards during the massive job loss during the pandemic.

In June of the same year, BHN partnered with the government of California to provide $50 digitally delivered prepaid cards to California residents who received the COVID-19 vaccine.

“Our largest and most prominent clients have been government agencies and departments of social and health services,” said Gentry. “Those funds have benefitted vulnerable populations, from foster youth and family welfare to assisted care facilities to immigrant workers excluded from federal emergency aid.”

Payments for Good takes on the operational challenges that many organizations face. “What we do is take on all the administrative burden and all the servicing of disbursing the payments on behalf of the organization,” said Brune.

To learn more about Payments for Good, please visit the Blackhawk Network website, contact us on LinkedIn or reach out to us directly at or

Hear it For Yourself

To hear the PaymentsJournal Payments for Good prepaid card podcast, click here.