Plastic goes to sea
How much cash does it take to float an aircraft carrier?
Aboard the USS Harry S. Truman, the answer is: None at all.
Thanks to an innovative partnership between the Department of the Treasury’s Financial Management Service (“FMS”) and the Department of the Navy’s Naval Supply Systems Command (“NAVSUP”), the Norfolk-based ship — whose motto is “The Buck Stops Here” — has adopted a “hybrid” smart card, which includes a magnetic strip (functioning like a debit card) and a smart chip (e-purse), for its entire crew. This system, known as Navy Cash, also supports automated functionality allowing cardholders to receive a salary allotment directly onto their smart card. Equipped with special red-white-and-blue Navy Cash Master Cards issued by JPMorgan Chase (Treasury’s Financial Agent), more than 5,000 crew members use the cards to receive salary allotments, access their home bank and credit union accounts, transfer funds to their families, and make purchases aboard ship and ashore.
Even the vending machines aboard the HST (as she’s known to her crew) are now cashless. To make a purchase, sailors simply swipe the card through an electronic reader. As such, supply officers no longer have to collect, count and redeploy $250,000 in quarters — roughly half a ton — every month. On a ship with anchors weighing 30 tons apiece, the weight loss is negligible but the workload savings are real.
The greatest benefit is in overall administrative simplification, with respect to reduced workload for the HST’s Disbursing Office and automated reporting. In addition, the cost and effort associated with managing currency is eliminated. Sailors can determine their account balances instantly, at any time, and can specify how their pay is to be distributed — for example with part of it loaded to their debit card (up to a maximum of $1,000 at any time) and the rest going to their home bank or credit union account. In addition, they can use their Navy Cash cards at ATMs and wherever a MasterCard is accepted, in any port of call. The smart card has built-in security features as well, such as use of a PIN for most ship-base transactions and the ability to immediately “hot list” cards reported lost or stolen.
The program had its origins in 2001, when FMS and NAVSUP installed the application aboard the first two pilot ships, a guided-missile frigate and an amphibious assault ship. The program expanded to eight ships in 2003, and has extended to 16 more thus far this year, with about 25,650 Navy Cash cards now in use. NAVSUP plans to go cashless aboard a total of 175 ships by 2008.
For FMS, which annually disburses more than $1.7 trillion in federal payments and benefits, the Navy Cash program is a natural fit with its goal of reducing the cost of such transactions and eliminating currency aboard ships. NAVSUP, charged with providing quality supplies and services to U.S. Naval forces, sees Navy Cash as a way to improve quality of life and benefits to participating sailors and Marines.
Meanwhile, aboard the USS Harry S. Truman, the Navy Cash program is getting high marks. “We couldn’t be any happier with it,” Cmdr. John King, the ship’s chief supply officer, told a Norfolk Virginian-Pilot reporter. “There were some skeptics when we first started. Now we have very few naysayers.”