The news that crisis loans for the poor may soon be provided through payment cards (aka food stamps) has been almost exclusively discussed in ethical terms. The right praises the scheme as a way of stopping the feckless from spending money on booze and fags, and would like it extended to all benefits, while the left points out the stupidity of trying to address a "dependency culture" (real or imagined) by making people less independent. As ever, when morality rears its head, you can be sure the real issue is being obscured.
In the Guardian, Zoe Williams talks about "expelling people from the sphere of money". By denying them the simple pleasure of spending, "the fillip of power in the process", you are making them a second-class citizen. "When you relegate people to a world outside money, you create a true underclass: a group of people whose privacy and autonomy are worth less than everyone else's, who are stateless in a world made of shops". Well, only if you consider shopping to be a human right, and Harrods to be some sort of sovereign state (old Mo' probably agrees).
This moralistic interpretation leads to the conclusion that the changes to the social fund are the result of an ideological government with a punitive attitude towards the poor. Yah boo. While I have no doubt the government (and their neoliberal confreres in Labour) are relaxed about the change, this ignores the fact that individual councils have been given latitude to decide how they will administer the new local funds. The introduction of vouchers is not the result of central government diktat, hence the decision of some councils to issue food parcels, fund food banks, or facilitate credit union loans instead.
The decision of others (probably many) to use prepaid cards should be seen as a default response: unthinking rather than malicious. When faced with a new responsibility, councils now instinctively look to outsource delivery. As a proven relationship is valuable, this gives an advantage to incumbent suppliers. It just so happens that Sodexo, an on-site outsourcing firm with numerous local government contracts, currently manages the Azure prepaid card for asylum seekers on behalf of the UK Border Agency (as was).
Being a large corporate, Sodexo has an interest in dealing primarily with other large suppliers - i.e. the merchants who will accept the cards. This strategy helps ensure wide service coverage and lower transaction costs through economies of scale. Unsurprisingly, the Azure card is currently restricted to large national supermarket chains like Sainsburys and Morrisons. You can't buy bananas with it at your local market or convenience store, let alone a scratchcard or a can of White Lightning. These large chains also have sophisticated till systems that can automatically reject invalid purchases, regardless of the personal sympathies of the checkout cashier.
The inexorable logic of capitalism turns the crisis loan into a commodity in its own right. Some commentators have drawn a parallel with nineteenth century attitudes to pauperism, but the potentially more significant parallel is with that era's truck system, whereby part of a worker's wage was paid in tokens that could only be redeemed in a company store. In contrast to industrial capitalists seeking vertical monopolies over their workers, this modern variant is an alliance between government, the supermarket cartel and privileged intermediaries. It's easy to see how it could be further extended, not just to unemployment and disability benefits, but conceivably even to in-work benefits such as tax credits.
To make this work, it would be necessary to destigmatise food vouchers. This isn't necessarily that big a challenge. After all, Luncheon Vouchers weren't considered demeaning as an employment perk. If they simply add the tax credit in the form of points to a loyalty card, they'd be home and dry.