Article

Changing the face of funds transfer

EFTA Executive Director Kurt Helwig wants financial transactions to be all electronic, all the time. by Kevin Gibson, contributing writer

February 21, 2002

H. Kurt Helwig won't stop at a gas station where he has to go inside to pay.

Some people look at "pay-at-the-pump" technology with mistrust, almost like something from science fiction. Helwig envisions it as part of an almost paperless society -- perhaps not so far in the future.

As executive director of the Electronic Funds Transfer Association, it's his job to educate private organizations, companies and government at all levels -- in effect, anyone with a role in electronic payments -- about electronic commerce, and to provide leadership to the ever-growing industry.

According to Helwig, don't be surprised if someday all transactions are made electronically.

"This trend toward electronics is certainly going to continue," Helwig said. "It's like the old cliché that the tide will lift all the boats. We've been talking about moving to a paperless society, about checks going away, for 25 years, and it hasn't happened yet. In spite of that, we have all these new technologies we're substituting for paper."

Will this sci-fi scenario come true? He hesitates to say for certain. After all, the technology is still young and subject to government regulation. But Helwig knows the potential is there. ATMs, POS payment at grocery stores and, of course, pay-at the-pump gas stations are indicators that society is slowly moving in that direction.

One trend that Helwig considers important is increased consumer interest. "The industry is not driving this any longer -- consumers are driving this," he said.

The paper chase

Another development that is creating interest in e-commerce is the federal government's 1996 Debt Collection Improvement Act, which calls for electronic transfer of all government payments except tax refunds. "This is going to potentially add billions of transactions to the payment system as we move farther away from paper," Helwig said. "Most states in the country have EFT [electronic funds transfer] programs that replace food stamps with debit cards."

Helwig and the EFTA, which evolved from a 1977 presidential commission charged with providing protection for credit card payments, are at the forefront of these changes.

"One of the things I'm proudest of here is the work we've been able to do to educate Congress and the executive agencies on how to regulate (EFT) and remove barriers to it," Helwig said. "It's one of those instances when the interests of the government and the private sector come together. We're saving the government billions of dollars in fraud alone. Now we have pretty much nationwide electronics benefits transfer."

Helwig said the next step is to transfer all other government payments electronically. "Now we're going beyond food stamps," he said. "WIC programs, Social Security -- that's the next frontier, if you will. Retirement payments, any government payment. Right now, tax refunds are exempt from that. Who knows
how long that will be the case?"

Helwig said there are waivers for those who don't want to use the technology or for those without bank accounts. But the eventual goal is to involve everyone in this system. "There are 10 million unbanked consumers receiving government benefits [according to Treasury statistics]. What's exciting about that is that's potentially 10 million new customers, a new transaction base of 10 million that will be hitting the retail delivery channels."

On the same team

More transactions may mean a need for more ATMs. That's just one area in which the EFTA and the ATM Owners Association can help each other. Helwig has great respect for what might be considered his organization's first cousin. "I think it's a good group. There are many areas in which we can work together," he said.

Legislation regarding ATM surcharges is another issue in which the two groups share an interest. "It's easy for me to keep track of what's going on in Washington from a federal legislation standpoint," said Helwig, a Washington, D.C.-area native whose organization is located in Herndon, Va.

"It's more difficult for me to do that on a state-to-state basis. Right now, I think that's where the biggest challenge lies," he added. "I ask (the ATMOA) to let me know if they hear anything going on in a certain state because they're going to hear that before I am. My plea is, 'Let me know, and we can put some resources behind it and work together to defeat something or get something passed.' "

Helwig is especially proud of his organization's efforts to defeat proposed federal legislation banning ATM surcharges. He notes that the EFTA was the first national trade association to tackle the issue. "Three years ago when it was first introduced, no one else would. I think our board of directors stepped up and took a leadership role." As a result, Helwig ended up testifying before the Senate Banking Committee.

The saturation question

When asked the often-posed question of when and if a saturation point will hit the ATM business, Helwig let out a heavy sigh before tackling the issue. "Broadly speaking, I don't know the answer to that question," he said.

He recalled that an aide to former Sen. Alfonse D'Amato, a major player in the attempt to ban ATM surcharges nationwide, asked him "How many ATMs is enough? Don't you have enough already?" Helwig believes the market dictates the answer to that question.

"There will be locations where volume, despite the surcharge, will not be enough to justify placement of a terminal. Responsible companies understand that. They do a business case before they arbitrarily place a machine there," Helwig said. "You've got to do your homework. There's going to be some areas where they succeed and some where they fail. That's just (the nature of) a developing business, that's nothing new."

Regardless of which part of the job he's dealing with -- whether it's lobbying or educating -- it's clear Helwig is passionate about his work by the excitement in his voice when he discusses the growing EFT industry.

"What I enjoy about it is the fact we're dealing with leading-edge technology here. We're kind of at the forefront of a payment-system revolution," he said. "I find that very exciting. I like to think I'm playing a small role in facilitating that. Look at the number of ATMs today. When some of my colleagues started 20 years ago, they were the original people selling them."

C-Span fan

Helwig characterized himself as an "inside-the-beltway type," noting, "I'm one of the weirdos who will listen to C-Span on the radio and think it's pretty cool."

It's not surprising, considering his interest in the nuts and bolts of policy making, that Helwig was a political science major at Belmont Abbey College. He spent many years working on Capitol Hill before joining the EFTA six years ago as government relations director. He rose to senior government relations director, then to executive director of the organization, a post to which he was appointed in November 1995.

While it seems he's found his destiny, Helwig said he does miss hanging out on Capitol Hill. Many of us furrow our brows at the thought of being immersed in politics on a daily basis, but not Helwig.

"I tend to be a cynic sometimes, but I also can be an idealist too. I'm one of those people who thinks our political system works and that politics can be a noble calling," he explained.

He paused, then added, "Although, recent history would say otherwise."