SOUTHERN STATES' EBT PILOT PICKS CITIBANK

DENISE ZIMMERMAN

WASHINGTON -- The Southern Alliance of States' pilot program for a national electronic benefits transfer system has moved ahead with the designation of Citibank, New York, as the financial services agent.

The U.S. Treasury's Financial Management Service, which issues 85% of the federal government's annual payments, made the announcement last month and called the selection of a financial agent for the SAS pilot an important step toward paperless distribution of government benefits.

"The designation of Citibank marks the initial rollout of EBT across the nation," said Russell Morris, FMS commissioner.

FMS' selection of Citibank does not propel the EBT program forward dramatically, however, as each of the eight states must now negotiate separate contracts with Citibank.

"It's a significant step in that there has been a series of roadblocks put in the way of the SAS EBT project in terms of legal challenges and the sheer complexity of getting that many states together," said Peter Larkin, vice president of state government relations and environmental affairs for the Food Marketing Institute here.

"There are still several other important steps ahead of us," he added.

Larkin said the original timetable for rolling out EBT to Alabama, Arkansas, Florida, Georgia, Kentucky, Missouri, North Carolina and Tennessee would likely not be met.

"To assume we can get this up and running by March 1996 is overly optimistic," he said.

A rapid EBT implementation, however, is not necessarily in the best interest of all retailers, he noted.

"While we want to help [the EBT Task Force] move forward, if they move too fast, they will not allow enough time for retailers using their own equipment to modify their hardware and software," Larkin said.

The designated subcontractors for the SAS project are Deluxe Data Systems, Lockheed Martin IMS and First Union Corp.