Everyone on Guam who has ever obtained a driver’s license, renewed a vehicle registration or paid other government fees at the Department of Revenue and Taxation has seen the sign. If you want to use a credit or debit card to pay, it’s going to cost you.
What’s described as a ‘convenience fee’ in present Guam law has had the perverse effect of driving payments away from the cards and back to personal checks. Bad checks—far too expensive for the government to collect—have cost more than $6 million in lost government of Guam revenue, going back to 2011.
Senator Tommy A. Morrison, who says he’s far from the only one to ever write a check at Rev and Tax, to save a few bucks, wants to change to a more dependable means of collecting these fees, one which is not only more convenient to taxpayers, but saves them some money as well.
A bill originally authored by Senator Morrison and incorporated in the present budget bill calls on the Guam Office of Technology join with DRT and the Department of Administration to figure out a better collection means. “I Liheslaturan Guahan supports the adoption of available technology and payment systems that do not adversely affect the taxpayer and the government of Guam,” the present bill language reads.
That may mean using systems supported by Bitcoin and similar crypto-currencies, which are developing fast and becoming widely used in Asia, notably in Japan where Bitcoin is defined as a legal currency and the Philippines, where Bitcoin can be bought and spent at all 7-11 stores. And Morrison estimates fifty to one hundred Guam merchants are already taking this means of payment.
Senator Morrison says the Consolidated Commission on Utilities has led the way on this locally. CCU negotiated an agreement with credit/debit card companies knocking the fee for utility payments down to 65 cents per transaction. That charge is absorbed by the utilities, rather than being passed on as a ‘convenience.’ It’s the same process involved in a normal card purchase, in which the merchant eats the transaction charge in order to win the business.
“People are looking at Bitcoin as a way to transact. I mean, it’s instant and highly secured,” Morrison said. “There’s no doubt that when the transaction settles within ten seconds, it does benefit the government in the sense that you know it’s already collected.” Fees involved in such a system would amount to pennies a transaction, regardless of the amount involved.
Knowing there’s really money in the bank has very real implications for budget-making and handling of government funds, day to day. “If three or four million dollars came in today [with a Bitcoin based system], we would actually know that that money is in the account. If it’s three to four million in checks, we’re not sure,” Senator Morrison said.
Ratepayers in the future may be able to pay government bills with their smartphones and credit/debit card companies are rolling out features to be included in existing cards. This would allow a ratepayer at Rev and Tax to swipe the traditional card, which would pull the funds from his or her Bitcoin account.
“People are going to be using this technology with their normal habits and behavior in spending, using their card and not even knowing that they’re using the technology,” Morrison said.
Morrison and other advocates of crypto-currency point out that billions of people in the world have no access to banks or other means of participating in the international economy. Even on Guam, with a full blown banking system in place, has many people without bank accounts or access to other means to be part of the economy. (This article was published in the July issue of our print edition)