Across the United States, the efficient distribution of welfare checks has posed a logistical problem for years. In Ramsey County, Minnesota, welfare recipients could cash their benefit checks at the County's depository bank without a fee. However, acting as the depository bank created major hassles for the bank itself. In order to accommodate the stream of welfare clients during the three-day issuance period every month, the depository bank was forced to increase both staff and operating costs. In addition, standing in line for hours to cash the government check carried the stigma for beneficiaries of being a reliant on welfare. By mid-1985, the County had been through every bank large enough to accommodate their demands, and the present depository bank had announced it would close the County's account at the end of the year.
As a temporary solution, North Star State Bank agreed to handle the County's account while Midway National Bank offered to operate a temporary check cashing facility on the conditions that alternative solutions would be explored. Due to past banking problems, County officials had been investigating developing electronic technology's application to the distribution of government benefits since 1983. A pilot project was launched in June of 1986 with the aid of the TransFirst Corporation to explore the feasibility of electronic transfer of public assistance benefits to 1,000 welfare clients. By 1988, the Electronic Benefit Transfer (EBT) pilot program was deemed to be successful and cost effective. County officials expanded EBT to all welfare recipients, making it the first jurisdiction in the nation to automate the authorizing and dispensing of cash benefits.
Recipients of governmental support programs such as Aid to Families with Dependent Children (AFDC), Refugee Assistance, General Assistance, and Minnesota Supplemental Assistance are educated about EBT. Although some clients may be unable to use the system due to a handicap or living situation, those that are determined eligible are trained on how to use the machines and are issued a card with a PIN. Instead of standing in lines that wrap around bank lobbies, benefit recipients now withdraw funds from any of the three ATM networks, with 125 machines scattered throughout Ramsey County. Clients may also use Point-of Service (POS) terminals at five locations. In addition to saving time, the EBS eliminates the stigma that often accompanies picking up a welfare check. Rather than going to the designated banks, welfare recipients are now able to access benefits through the same machines that are open to the general public. Furthermore, clients do not have to withdraw their full benefits at one time, which allows better budgeting. Clients also no longer have to worry or deal with the hassles of a lost check in the mail. Steps have been taken to minimize the possibility of welfare fraud by tracking the use of ATM's outside of Ramsey County and instructing clients that if they give their card and PIN to someone else, the benefits will not be replaced.
As of 1990, approximately 11,117 Ramsey County residents, 88% of the potential clientele, received a total of over $4,500,000 in monthly benefits through EBT. Due to the program's popularity, County officials are considering expanding the technology to the delivery of child support payments, day-care payments, and foster care payments. In addition, Minnesota wants to adapt EBT in counties state-wide, and over 25 other states have contacted Ramsey County in regards to potential replication efforts.