fairybasslet:I don't know about it being so labor intensive. Replacements or upgrades can be gotten online. I doubt there is much human labor required.
OK, so now, rather than paying someone to open an envelope and route the request to the correct department, someone has to open an email on a computer. They still have to verify information, format (even electronically) the card with the (hopefully) correct photo and information, print the card, stick it in an envelope and place that envelope in the mail. It still takes work by a human being who will want to get paid come friday.
To take it a step further, If the payment was paid for with a credit card, the processing company takes an average of 2% of the cost plus the transaction fee of say, maybe $.30 of the total. That is about $.90 of the transaction.