Visa Direct says government payouts can move beyond checks

Visa Direct government payouts are being presented as an immediate way for public agencies to reduce reliance on mailed checks for tax refunds, disaster relief, juror fees and other disbursements. Curtis Webb, head of B2B strategic payment solutions at Visa Direct, told PYMNTS CEO Karen Webster that the payment infrastructure already exists, while delays continue to affect households that need funds quickly.

Webster cited research conducted with Visa Direct showing that 83% of constituents say they need access to money in real time. Webb said the issue is less a lack of payment technology than the pace at which government bodies replace paper-based processes with digital alternatives.

“[Constituents] need their money now,” Webb said in the PYMNTS interview. He also described government disbursements as “a massive opportunity to modernize payments.”

How would Visa Direct government payouts work?

Webb said the basic rails are already in place because many constituents carry debit cards linked to bank accounts, and issuing banks can receive transactions through existing card infrastructure. Card-based payouts can use credentials that people are more likely to have readily available than bank routing and account numbers, which are commonly required for ACH payments.

ACH transactions often rely on batch processing, which can add time before funds arrive. By contrast, Webb’s argument is that card-linked disbursements can make public payments faster without requiring agencies to wait for an entirely new payment system to be built.

Why are agencies still using paper checks?

Government payments remain tied to paper for operational and institutional reasons, according to Webb. Procurement processes, legacy technology and divided agency priorities can keep check printing, mailing and reconciliation in place even where digital alternatives are available.

Unclaimed property illustrates the complexity. Webb said those claims can involve identity verification, claim validation, account confirmation and jurisdictional review before money is released. In some states, he said, a digital start to the process can still lead to a paper follow-up.

Physical checks also create fraud and recovery burdens. Webb cited cases in which checks stolen from mailboxes led to recovery efforts that consumed more time and resources than the original payment amount.

Procurement is a major bottleneck

Webb said federal efforts to reduce check use are influencing states and local governments, but adoption can be slow. Agencies may face long timelines to assess vendors, issue requests for proposals and launch new payment capabilities.

One approach gaining attention is collective purchasing, according to the PYMNTS discussion. These arrangements let agencies use solutions that have already passed competitive review, reducing duplicated procurement work and giving smaller jurisdictions access to terms negotiated by larger ones.

Webb said agencies could begin with payments that are high-volume and relatively straightforward, including juror payments, tax refunds and small-dollar reimbursements. The aim, he said, would be to build operational confidence before expanding to more complex programs.

Visa Direct’s case rests on the view that faster payouts can also lower administrative burdens. Fewer checks would mean less printing, mailing, reconciliation and recovery work, while constituents would receive funds through cards already in their physical or digital wallets.

The full PYMNTS interview with Webb is available here.

This story draws on original reporting from PYMNTS.