Feds to take payments from digital wallets

In an effort to ease the friction inherent in payment systems and tighten security, the federal government's web portal for collecting payments to agencies is now accepting PayPal and Dwolla, digital wallet services that give customers options to conduct transactions via the Internet or mobile apps without needing  to enroll in a system or provide personal information.

The move by the Treasury Department’s Bureau of the Fiscal Service brings the Pay.gov portal in line with similar digital payment options offered by commercial websites that move electronic transactions away from less efficient paper-based systems.

The federal government is also working with financial institutions to support the use of Apple Pay to facilitate electronic transactions for federal workers, but isn't there yet.

"Apple, Visa, MasterCard, Comerica Bank and U.S. Bank are committed to working together to make Apple Pay, a tokenized, encrypted service, available for users of federal payment cards, including DirectExpress and GSA SmartPay cards," said a statement issued ahead of the White House's Feb. 13 Summit on Cybersecurity and Consumer Protection at Stanford University in Palo Alto, Calif.

Speaking at the summit, Apple CEO Tim Cook said his company is working to make Apple Pay available for consumers to use in some federal transactions, such as entry fee payments at national parks, by September.

According to the Treasury Department, the latest implementation of PayPal and Dwolla is part of an ongoing effort to move away from paper-based processes to secure electronic transactions.

"Digital wallets provide convenience, simplicity, and a trusted customer experience, while achieving cost effectiveness for the federal government," Corvelli McDaniel, assistant commissioner for revenue collections management for Fiscal Service, said in a statement.

Dwolla and Paypal have been working with state and local governments for some time.

In 2013 Iowa Gov. Terry E. Branstad announced the state would partner with Dwolla for the electronic payments for the Iowa state government. And one Iowa school district uses Dwolla to let parents make online payments to a child’s lunch account, eliminating the need for parents to send checks or cash and allowing the school to avoid high transaction fees of using a credit card-based system.

This article originally appeared on FCW, a sister site to GCN.

About the Author

Mark Rockwell is a senior staff writer at FCW, whose beat focuses on acquisition, the Department of Homeland Security and the Department of Energy.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at mrockwell@fcw.com or follow him on Twitter at @MRockwell4.


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