[LINK] Smartcard mooted for federal welfare payments

Bernard Robertson-Dunn brd at iimetro.com.au
Tue Apr 21 09:33:50 AEST 2009

Smartcard mooted for federal welfare payments
Karen Dearne
April 21, 2009
The Australian

THE federal Government's welfare payment BasicsCard may become a smartcard.

The Human Services Department is preparing to approach the market for an 
alternative to its magnetic stripe card.

Human Services assistant secretary Brian Olsen said there had been no 
decision on whether to "exclude or require chip technology".

Plans to open bidding for the welfare card system industry follow an 
initially restricted tender, won by Retail Decisions, to fast-track the 
creation of an income management scheme.

Retail Decision's ReD Prepaid Cards arm was paid more than $2.5 million 
to design, build and operate BasicsCard in the present financial year.

Under the Northern Territory emergency intervention, Centrelink pays 
half of a person's benefit on to the card, quarantining funds for the 
purchase of food and other essentials at authorised stores.

Federal Community Services Minister Jenny Macklin has pledged to 
continue compulsory income management in the NT -- and in two other 
trial areas -- but the department emphasised that the tender "should not 
be taken as a sign of an intention to expand the scheme".

Ms Macklin has previously signalled a continuing overhaul of the 
delivery of social services, including pension reform, in the planned 
federal budget.

Meanwhile, briefings were held last week on the proposed Income 
Management Card Replacement Project, seeking industry comment ahead of 
the release of the tender in June. In particular, the department is 
trying to fix flaws exposed by the trials.

A serious difficulty is that the card uses the Eftpos network, which 
means customers are unable to obtain a current balance or check whether 
money has been paid into the account.

Centrelink has set up a hotline help service, but customers say the 
process is cumbersome and time-consuming.

It's understood the department may trial new autoteller sub-networks as 
a channel for balance inquiries. No cash-outs are permitted on the 

These providers already offer low-cost autoteller access to credit union 
customers, for example, and they are expanding their kiosk networks in 
response to regulatory changes.

Mr Olsen said the highest priority was to ensure the card was secure and 
fraud-proof, "because we want to ensure welfare recipients spend money 
in the interests of their children".

There were no plans to display a photo on the card, he said, and the PIN 
terms and conditions complied with industry standards.

"The Centrelink system itself does not interface with the Eftpos 
network," Mr Olsen said.

"For the current BasicsCard, Centrelink only interfaces with the card 
transaction services provider's system -- that is, Retail Decision's 

To date, more than 16,500 users have been issued with cards, and nearly 
1000 merchants have signed on to the scheme.

The initial rollout resulted in a high percentage of replacement cards 
being issued as some users failed to understand that funds would be 
topped up on the cards as payments fell due.

Mr Olsen said no instances of cards being sold or used by others had 
been reported to Centrelink.

"Most customers retained their original card, but a minority required 
multiple replacements due to cards being damaged or misplaced," he said.

"We're conducting an education program for those customers at the time 
of reissue."

Human Services chief technology architect Marie Johnson said last month 
the plan was to use existing infrastructure, including communications 
lines and point-of-sale terminals, at no extra cost to stores or customers.

"We pay monthly fees to the provider -- in this case, Retail Decisions 
-- for a range of services including the provision of card," she told 
the House of Representatives inquiry into the operation of stores in 
remote communities last month.

"They also have a number of subcontracted arrangements for switching 
services and settlement," she said.

The trial has not been without technical problems.

One Friday in January, the system went down for more than 12 hours, 
leaving many people without supplies for the weekend, as they could only 
use their cards in designated stores.


Bernard Robertson-Dunn
Canberra Australia
brd at iimetro.com.au

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