Government Agencies Must Embrace Payment Portals
Portals are everywhere. No, I’m not talking about some science fiction movie portal that can take you to another dimension. I’m referring to an online payment portal where your people can make electronic payments for everything from food to clothes to utility bills.
And government agencies must embrace these online payment portals to better serve their constituents.
Behind the times
Traditionally, government agencies have not been considered early adopters. In fact, government employees and their constituents often consider government agencies, specifically smaller agencies and local offices, as lagging behind in terms of technology adoption.
This is due, in large part, to the typical government procurement processes that are often complex, costly, and slow. As technology moves at such a rapid pace, governments have difficulty keeping up. By the time an agency finally adopts and begins using a specific technology, it can already be outdated and ready for an upgrade.
Budget concerns also play a role, as public agencies must balance investing in technology with the worry that unused funds in their budget will inevitably be redirected to another agency or priority in the next budget cycle.
In addition, private sector tech companies usually pay employees better than their government agency brethren. This is because most civil service systems have rigid job classifications and salary structures, meant to provide transparency. That makes it difficult to attract and retain the talent necessary to implement and maintain many tech solutions.
With these hurdles, it’s no wonder government agencies are often seen as technology laggards.
Give them what they want
However, citizens are just the opposite — quickly able to adapt to new technologies that excite them or make their lives a bit easier. The pace of digital adoption is proof.
Citizens use their laptops, tablets, smartphones, and even smart watches to purchase goods and services, as well as pay bills. The early fears about privacy and security when shopping or paying bills online have been alleviated.
In fact, more U.S. citizens believe that online is the most secure way to pay bills. In a recent survey of U.S. adults who receive bills/statements, 64% believe that paying bills online is secure, while only 47% think mailing a check is and only 34% believe paying over the phone is.
And making payments online is a welcome convenience for a majority of citizens. The survey revealed that 65% of citizens prefer online payment methods for their regular monthly bills, such as car payments, cellular bills, mortgages, recurring medical bills, and more.
These preferences were noted across all groups, even among older generations, which are often seen as less trusting of conducting business online. According to the survey, 70% of citizens 55 and older are most comfortable paying regular monthly bills online.
Another survey revealed that 82 percent of Americans used digital payments in 2021. That number grew from 78 percent in 2020 and just 72 percent only five years ago. And the numbers keep growing.
So much so that the total transaction value in the digital payments segment is projected to reach more than $2 trillion by the end of 2023, and is forecast to have an annual growth rate of 14.66%, resulting in a projected total of more than $3 trillion by 2027.
More than money
It’s clear that your constituents want an online payment portal. But what’s in it for government agencies?
For starters, adding an online payment portal will help increase constituent engagement. With a payment portal, constituents can schedule payment times that best fit their life. They can also break up their payment by setting up recurring payments, which enables them to keep their accounts up to date without breaking the bank.
In addition, an online payment portal can also increase your revenue stream. These portals have direct connections with all card brands and ACH networks to help streamline payment processing. This provides you with faster access to funds, as they often have next-day funding capabilities.
And an online payment portal may even be able to integrate into your current payments platform to help increase agency efficiency. It provides you with the power to set up automated payment reminders and receipts for your constituents, as well as built-in reporting tools, and self-service options for payments and reports.
It’s more urgent than ever for government agencies to incorporate online payment portals. So much so that Visa recently formed its Government Solutions unit to help modernize government payments and help agencies find faster, cheaper, and ultimately, safer ways to accept payments.
This movement toward online payments isn’t going away, and government agencies that don’t embrace online payment portals are missing out on a host of benefits.
Your constituents are ready. Are you?
Do you want to learn more about citizen payment and communication preferences? Read this survey report from Finvi.
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