• Reduced processing costs associated with cash and check payments;
  Reduced transaction processing time and costs;
  
  
• Improved payment verification and auditing through real-time authorization and verification;
  Reduced accounts receivables and payment delinquencies, and fewer need for debt collection activities; and
  
  
• Improved fund availability by reducing check float and enhancing cash flow.

"Credit cards offer an additional benefit to citizens and taxpayers in the form of short-term credit. This credit option offers additional taxpayer relief by providing the opportunity for payment spreading and cash flow management for those who may otherwise face difficulties in paying large tax or fee payments at a particular point of time but who could otherwise manage payments spread over time. Debit cards also offer further advantages over credit cards. Obtaining a debit card is often easier than obtaining a credit card, and thus accepting debit cards as a payment option serves a larger pool of potential users."(p.26)

"Electronic payments for government taxes and fees -- whether in the form of ACH, credit card, or debit card -- offer many benefits to government agencies and citizens. These include: reduced processing costs associated with cash and check payments; reduced transaction processing time and costs; improved payment verification and auditing through real-time authorization and verification; reduced accounts receivables and payment delinquencies, and fewer need for debt collection activities; improved fund availability by reducing check float and enhancing cash flow; added convenience for citizens." (p.20)

"91% (30 out of 33) the responding states had programs in place to accept credit card payments. They further found that most states were planning to expand their electronic payment programs. These included adding more payment types via the Internet, expanding the program to include more types of taxes or fees, adding direct debit or e-check capabilities." (p.32)

• ACH was the most commonly used electronic payment option for business-related taxes while credit cards were the most commonly used electronic means for individual income tax payments as well as licenses or permits.
  
  
• Of the responding states, 95% indicated that they provided citizens the option of paying some form of state taxes or fees with a credit card while 54% permitted debit card payments.
  
  
• The major reasons cited for accepting electronic payments were to expedite deposits and to reduce the time it takes for funds to be available, and to reduce the costs of collecting and processing payments.
  
  
• Indiana reported the highest annual dollar amount of net savings from accepting credit and debit card payments: a net savings of $12 million for the state.