Pushing Forward: CA DCSS Continues Efforts to Send International Electronic Payments

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In 2017, California made its first international direct deposit transaction with Austria, sending a total of $25,000 for the four child support cases between the two countries!

By: Kayleen Carter, CA DCSS

In 2008, the Obama Administration ratified the Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance. It was a landmark agreement that brought together 33 countries to work together to establish and enforce child support orders across international boundaries (see InsideDCSS, August 2017). When the United States ratified the Hague convention, the California Department of Child Support Services (CA DCSS) was able to join other countries and receive new cases. However, with those new cases, nuances have arisen in finding a way to send electronic payments internationally.

Countries who had ratified the Hague treaty were also working to comply with the requirement that electronic methods of communication and funds transfer must be used whenever possible. There has been increasing pressure to find a new way to send payments, as countries have been refusing paper checks for many years (see InsideDCSS, March 2018).

Michelle Meier, Manager of the Office of Intergovernmental Services (IGS) at CA DCSS, stated that the IGS team had its first taste of resolving international payment solutions with Mexico two years ago. One of the major hurdles in dealing with Mexico’s international payment issues was that individuals often faced check-cashing fees that exceeded the amount of the check they were trying to cash.

Challenges like this paved the way for the introduction of international electronic payment cards (EPCs). By early last year, California was able to offer EPCs to 400 individuals in Mexico by working through the Mexican Consulates, with 80 percent of those individuals receiving and activating their EPC to begin receiving their payments.

The solution that was used for Mexico is still improving as it is applied to other countries due to the unique set of banking rules established in each country. The difficulty, over and over, lies with once the payment is received, the identifying data used for accurate distribution – names and case numbers – is not necessarily being received at the other end.

California has the State Disbursement Unit (SDU) which centrally collects and processes payments, however, many countries do not have a central bank or any sort of disbursement unit to act as a central payment clearinghouse. CA DCSS has had success with some countries, such as Austria, where considerable time and energy was invested into making a solution possible.

Meier said that CA DCSS is currently working to set up electronic payments with Germany (152 cases), the Czech Republic, the Netherlands and New Zealand. InsideDCSS will continue to follow up on these complicated efforts – and our successes – as they gradually unfold. With our LCSA partners, we look forward to sharing the joy of helping families on a global scale!