Welfare and food stamp recipients can receive benefits through the NYCE electronic banking network.
Two states in NYCE's territory-Connecticut and Massachusetts-have adopted electronic benefits transfer. Welfare and food stamp clients there have access to NYCE's 18,600 automated teller machines and 113,000 point- of-sale locations in New York and New England.
The ATMs were brought into the system in February, when Connecticut started issuing EBT cards. The POS terminals were on-line by August.
The automated service will be available in the other northeastern states as they issue EBT cards.
The arrangement means more transaction fees for NYCE. It also means that Citicorp, the government EBT contractor for New York and New England, need not sign up individual financial institutions and merchants to participate.
Other governments in the Northeastern Coalition of States, an alliance formed to achieve economies of scale in EBT, plan to issue cards within the next two years. Federal law mandates that all states switch to EBT by 2002.
"NYCE has helped ensure the success of EBT in the states we service by accepting the technical challenges on behalf of our participants," said Susan A. Zawodniak, vice president and executive director at NYCE.
William Kilmartin, state comptroller of Massachusetts, said the NYCE network's participation "gave us almost immediate assurance of recipient access."
The state has converted three-quarters of its 200,000 recipient households to EBT since the program started in April. "The more devices our recipients can have access to, the more comfortable we are with our public policy," Mr. Kilmartin said.
In most other regions, EBT cards do not carry a commercial network logo. Many are branded with Quest, denoting adherence to a set of national operating rules for these programs.
NYCE has taken the still unorthodox step of placing its name-along with the Quest logo-on EBT cards in Connecticut and Massachusetts. Company executives said they hope the policy will promote the NYCE brand and reinforce its dominance in the Northeast.
Helena G. Sims, senior director of the EBT Council, a rulemaking body sponsored by the National Automated Clearing House Association, said the Northeast is an example of the how the government program can run on an existing commercial infrastructure.
"It is significant in that EBT is using the commercial network for routing transactions," she said. "It is really the melding of the public and private sectors."