California employment dept. selects new payment vendor after extensive fraud

California swapped out Bank of America for Money Network amid as it starts a five-year, $1.2 billion tech overhaul known as EDDNext.
unemployment application papers
(Getty Images)

California last week announced it’s hired a new unemployment and disability payment contractor in an attempt to remedy its multi-billion-dollar pandemic fraud, which caused chaos for laid-off workers and fueled police busts.

The move comes as the Employment Development Department begins its five-year, $1.2 billion tech overhaul known as EDDNext. The news was first reported by CalMatters.

The department said it plans to start notifying 850,000 benefit recipients of the new payment provider, Money Network, an electronic payment company also used by Gov. Gavin Newsom to distribute stimulus checks during the COVID-19 pandemic.

Similar to the EDD’s previous deal with Bank of America, the state’s former payment vendor, the contract with Money Network will primarily be paid for through a debit card revenue-sharing agreement. Officials said the new EDD cards will include both the security chips and tap-to-pay options commonly found in consumer credit cards.


The agency said it will also pay $32 million over five years for Money Network to offer a direct deposit option to workers’ bank accounts, which EDD plans to roll out next spring.

The employment department said people receiving unemployment, disability and paid-leave benefits will next month recieve new Money Network debit cards, with payments starting Feb. 15.

Those with Bank of America EDD debit cards have until April 15 to spend their remaining balances.

Sophia Fox-Sowell

Written by Sophia Fox-Sowell

Sophia Fox-Sowell reports on artificial intelligence, cybersecurity and government regulation for StateScoop. She was previously a multimedia producer for CNET, where her coverage focused on private sector innovation in food production, climate change and space through podcasts and video content. She earned her bachelor’s in anthropology at Wagner College and master’s in media innovation from Northeastern University.

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