As paying by cash becomes less popular, electronic bill payment is the future of revenue collection – both in the private sector, as well as the public sector. In fact, according to the Federal Reserve’s recent research (2022), “The number of core noncash payments grew by a larger amount from 2018 to 2021 than in any previous Federal Reserve Payments Study measurement period since 2000. Specifically, the number of noncash payments grew by 30.7 billion, increasing to 204.5 billion in 2021.”
Today’s residents expect to be able to pay their bills whenever and wherever they are, whether it’s from their home office, while vacationing in another state, or anywhere in between. They want to conveniently pay license and permit fees, tax bills, traffic citations, recreation fees, and more.
However, introducing electronic payment methods isn’t without its challenges for government offices. The right technology stack can streamline back-office processes while addressing payer expectations. Below are five things to keep in mind when engaging with technology providers about how they would simplify your payments ecosystem and help you meet the needs of your state and local community.
Your payments solution vendor should offer you a flexible fee structure with no subscription or licensing costs for software. The flexible fee structure means you can provide predictable rates for your electronic bill payers – whether you pass the fees along or absorb them. Keep an eye out for hidden fees such as statement fees, annual fees, gateway fees, or monthly minimums. Ensure you have a full understanding of contract terms and any additional fees. It’s important to understand the subject of fees is complex. Regulations can dictate how fees are assessed. An experienced vendor with experience in the public sector will work with you to develop a fee structure that meets your government’s unique needs and budget requirements.
Security and Compliance
Data security is top of mind for both consumers and governments. To prove that industry standards for security are being met, a vendor should be compliant with the Payment Card Industry Level 1 Payment Application Data Security Standard.
Your vendor should be a registered merchant service provider (MSP) or a certified payment facilitator equipped to handle all aspects of the payment process, including onboarding, shopping cart, checkout, fee handling, and receipts. This advantageous bundling of tasks reduces the number of entities required to handle residents’ sensitive information and simplifies operations.
It should come as no surprise, but fewer siloed or disparate solutions result in more control for government agencies. Put simply, a single payment solution simplifies your workflow. You only need to work with one vendor, streamlining software integrations and simplifying PCI compliance. Ideally, your vendor offers a proven payments hardware/software/compliance solution with native integrations to your core systems.
“Gone are the days of niche solutions for payments,” says Rich Taylor, vice president of payment solutions at Tyler Technologies. “Jurisdictions of any size are looking for something that layers across their systems.”
Your provider should handle all aspects of the payment process, including onboarding, payment support, reconciliation, and hardware. An integrated solution means financial data is uniformly updated throughout the organization. Also, an integrated solution powered by Amazon Web Services (AWS) enhances scalability, security, and reliability — vital components of a payments system.
In-Person Payment Needs
The preferred vendor will provide cashiering solutions, enabling over-the-counter transactions to further simplify your payment operations. An integrated cashiering solution standardizes your collection process and creates a single entry point for payments, providing greater control of the workflow, and making certification reporting easier.
An ideal vendor will assist you with marketing strategies to inform residents about electronic payment options and benefits.
Of course, customer adoption is ultimately related to convenience and usability. A payment system should include the following for maximum engagement:
- A user-friendly, public-facing portal that makes bill paying easy and convenient
- Real-time payment processing that reflects updates to payer account balances immediately
- Options for payers to set recurring payments and schedule payments for a future date
- Acceptance of various payment methods, including credit cards, e-checks, and digital wallets
- The option for customers to pay as a guest for quick single payments, or as a registered user to access history and streamline account connectivity
Realizing the Benefits of Electronic Payments
As we’ve seen, electronic payment functionality is playing an increasingly important role in revenue collection. As the Federal Reserve notes (2022), “The number of card payments grew by 25.9 billion from 2018 to 2021. With 157.0 billion payments in 2021, card payments accounted for approximately 77 percent of noncash payments by number.”
And the benefits for government agencies are clear. Governments of all sizes and scopes are cutting expenses, serving the public more efficiently, and improving payer satisfaction by taking advantage of electronic payment functionality.
Choosing the right vendor will help you maximize the benefits of EBPP. A vendor with experience in the public sector will better understand your unique requirements. This vendor can combine proven public sector experience with a payment solution that meets your needs today and in the future.
Board of Governors of the Federal Reserve System. (2022) The Federal Reserve Payments Study: 2022 Triennial Initial Data Release. Retrieved from https://www.federalreserve.gov/paymentsystems/fr-payments-study.htm
This content is made possible by our sponsor Tyler Technologies; it is not written by and does not necessarily reflect the views of Route Fifty’s editorial staff.
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