Governments and consumers could save A$240 million a year by abandoning antiquated government payment practices, such as cheques, and switching to prepaid cards, according to a Deloitte Access Economics report issued yesterday.The report, Efficient and Modern Payments, was commissioned by Visa, which is hoping to generate some debate about the efficiency of government payment systems.The report argues that prepaid cards could be used as an alternative to the large volume of cheque and cash payments that are still made.Prepaid cards are a cheaper to process than either cash or cheques, and they offer other benefits besides this. Time-critical payments can be transferred the same day, which is useful for dealing with emergency situations. Prepaid cards can also be used to limit the use of certain payments. Multiple benefit payments for one recipient or family can be consolidated on to one card.  Prepaid cards can also be used to operate targeted payment arrangements, such as the Australian Government's Income Management Scheme. This scheme currently uses the BasicsCard, which is not affiliated with any payments provider and operates on purpose-built technology. Deloitte Access Economics surveyed a number of federal and state government agencies as part of its analysis.While the majority of payments processed through Centrelink, Medicare and the Australian Taxation Office are automated through electronic systems, there are still a significant number of payments that involve some form of manual processing.Centrelink issues an estimated 180,000 cheques each year in situations where it cannot make electronic payments. These are often exceptional circumstances, where payments are time-critical or where the recipient does not have a bank account or is temporarily unbanked (recently arrived migrants or people just released from prison, for example). Anecdotal evidence suggests that it costs the government up to $15 to issue a cheque when payment details need to be added manually.The vast majority of Medicare claims are processed manually - 26 million cash payments generating close to three million cheques a year. Seventy per cent of claims are paid in cash at Medicare offices or sent out by cheque. The proportion has come down from 80 per cent in 2009. The ATO issues close to two million cheques a year.State and local governments tend to issue more irregular payments.