Yes, you read that correctly. Apparently, the state of Texas has decided that it’s citizens carry around too many cards in their wallets and they would like to limit them by at least one. The have created a partnership with National Payment Card Association that will link your checking account to your drivers license. Mind you, this is the same state that says you can’t close on a home equity loan or line of credit for at least 15 days.

Let’s take a look at what enrollment in this program would mean, from their perspective…with my commentary following, of course.

How It Works

The gas station operator contracts with National Payment Card to operate this service. They have entrusted National Payment Card to provide payment services in the same way they rely upon Visa and MasterCard. National Payment Card has patent-pending technology that enables you to link your checking account and your selected PIN with your driver license so you can pay for goods and services at participating businesses. We utilize the driver license as a debit card because it is with you when you are driving and it’s convenient – one less card to carry.

Ok, since when has Texas ever been concerned about making things convenient? We’re a Red state that’s ultra-conservative…I’m really surprised by this, to say the least.

Is it Safe?

Your PIN-based payment is more secure than a credit card! We have selected National Payment Card as our payment processor. National Payment Card debits your account through the Federal Reserve in the same manner a bank debits your account for an electronic funds transfer such as a car or mortgage payment. National Payment Card is registered with VeriSign. VeriSign is the industry leader for web security and prevention of identity theft.

This little snippet doesn’t really answer the question in my opinion, it sort of grazes over it. While I think it is safe in the fact that it is PIN-based, I wonder how secure the network really is. There is no mention of network security in their FAQs, all it says is that it’s safer than credit cards. Ok, which ones? Each company has their own security measures and it just seems like their being a bit vague with this important piece of information As I understand it, this is currently for gas purchases only, but if this does well and takes off, do they have the capability of keeping our information secure?

Are my transactions being monitored by the federal or state government?

No. Even though your state issued driver license is the card that you link to your checking account, it is only used as an ID for the transaction, the same as if you were writing a check. National Payment card is the company that processes your transactions. This is a private company and is not affiliated with any government agency. Your personal information is secure and will not be shared or sold to any third party organizations or any government agencies. For more detailed information, please review the National Payment Card Privacy statement at:
www.paymentcard.com/privacy.html

Our cell phone carriers are third party companies with no government affiliations yet the FBI can appropriate phone records and triangulate our exact positions via satellite. Let’s not forget the fact that they can also listen in on phone calls, too…strictly for “national security” reasons, of course. Bet you didn’t know the government also has the right to see sales receipts, internet activity, and what books you’ve checked out from the library now, too. All thanks the Patriot Act, and you’re going to tell me they can’t view the transactions I’ve done with my Driver’s License…a state GOVERNMENT issued id? Yeah, whatever.

Why use the drivers license instead of a debit card?

Debit cards and credit cards are forms of payment that carry large merchant fees from the banking and credit card industry. These charges are transparent to you as a consumer. By eliminating these higher fees, the merchant is able to pass a portion of the savings along to you. This method of payment benefits both you and the merchant.

Apparently the participating locations are offering a discount on gas when you use the card. There are currently a total of 6 participating locations in the greater Austin area and they can choose the amount of discount given. The payment is ACH’d from your account, which is why they offer the discount because they are avoiding the interchange fees. That’s not a bad deal in that respect. Even if it’s only a few cents, that still makes a difference over the long run. The also have an introductory program with GE Motor Club that gives you two free benefits like fuel delivery, flat tire change, etc.

Verdict

As far as I can tell, it wouldn’t hurt to have this, if for no other reason than saving a little money on gas and in-store purchases. If you’re a bit of a conspiracy theorist or just leery of Big Brother watching, this probably isn’t for you. If you’re in the Austin area and would like more information about this, visit this link here . I don’t think I’ll be using this service simply because none of the locations are convenient, but if they open this up to more locations, then I may consider it. I’m paying for the gas with my debit card anyway, why not take advantage of the savings?

So, what do you guys think? Is this stupid or a good idea? Would you consider using your drivers license as an extension of your checking account?

Related posts:

1. Defeat Overdraft Fees and Debit Card Trickery Using Credit Card Smarts
2. Understanding Debit vs. Credit With Your Debit Card
3. Debit Card Disputes and How They Work
4. Debit Cards Causing Overdraft Fees
5. Who Do You Trust With Your Debit/Credit Card?