US Treasury To Accept Paypal
The U.S. Treasury recently announced that it will start accepting fees through electronic payment gateways like PayPal and Dwolla. For a pilot, the Treasury is starting with the Pay.gov portal, which handles approximately $110 billion in annual collections. The announcement underscores the Federal Government’s efforts to experiment with new technologies and help save taxpayers money.
The US government agencies collected $3.37 trillion in 2014 revenue and nearly 98% was settled electronically. The objective of experimenting with these electronic gateways is to offer a suite of online payment options and transition from less efficient paper-based transactions. The partnership with PayPal and Dwolla will also help expand the options available for transactions with the Federal Government.
Customers can now have greater choice and a better experience while paying their government dues or court filing fees, or even making a donation to the National Endowment of the Arts. Customers can enjoy payment options generally restricted to popular, private sector websites.
PayPal, which will spin out of eBay Inc (NASDAQ:EBAY) in mid-2015 to become a stand-along entity, is a leading name in the electronic payments industry. Activist investor Carl Icahn pressured the company to separate this faster growing payments business. Following the split, John Donahoe will step down as CEO of eBay.
Dwolla is an Iowa-based payment startup that evolved to outperform big banks in this race. It is also one of the partners for power tax collections at the state level and its disruptive approach helped it become the choicest partner of the U.S. Treasury.
Both, PayPal and Dwolla, have devoted operations to seek government business and this might have played to their advantage to tap into the new contracts. Customers can now pay using these gateways via the Internet or mobile applications, without the need to provide any personal information or enroll in a system.
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