Ohio implemented a new credit card system for distributing food stamps March 27, with more than $13 million in benefits transferred to the new cards.
The new Ohio Direction Cards replaced the old smart cards
which contained a computer chip and could only be used in certain checkout aisles with special card-reading machines.
The new cards have a magnetic strip and can be swiped like a regular debit card anywhere food stamps are accepted.
It's cheaper and less expensive for taxpayers and at the same time easier for people to use said Tracy Galway of Athens County Department of Job and Family Services.
The old system cost $29 million to operate each year, while the new system only will cost $6 million ' saving more than $23 million, said Jon Allen, communications director of Ohio Department of Job and Family Services.
As of December 2005, there were 1,069 food-stamp recipients in Athens who spent $162,821.
All benefits were transferred from the old cards March 27 and will be loaded automatically onto the card each month. Cardholders will no longer need to download their benefits each month.
The program, created through a contract with Texas-based Affiliated Computer Services, is renewable through 2013. Each food stamp case, or household using food stamps, costs the state 89 cents a month. Under the old smart card contract, each food stamp case cost the state $4.74 ' mainly because of the necessary card swiping machinery.
Another major advantage to the new food stamp cards is their convenience, Galway said. Previously, cardholders had to pick three locations to use their card. Now they can use them anywhere that accepts food stamps, even out of state.
People can go to any (checkout) aisle now and not just specified aisles; they look just like credit cards Allen said. It's nice from a stigma standpoint because it's hard to tell the (food stamp) transaction from a regular bank card.
One of the drawbacks to the new system is that cards can no longer be replaced locally. The main company that supplies the food stamp cards is located in Texas, and all problems will need to be called into the company, Galway said.
We can't do anything for lost cards in Athens anymore
she said.
Richard Vedder, distinguished professor of economics at Ohio University, said the new program might be susceptible to abuses.
However, Vedder said he would prefer a program that gave the poor more choice about how to spend the assistance funds.
Is this a new way to keep tabs on the poor? asked Vedder. While I do see some possible advantages
I worry about abuses of the system.
Vedder also said he wondered why people on food stamps would be traveling out-of-state.
During the first day of use, March 27, there were more than 422,106 transactions made with the new Ohio Direction Cards, Allen said.
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