Especially at the level of local government, the job of collecting payments electronically from citizens can be daunting: Budgets are tight and staff resources are often limited when it comes to the nuances of technology, compliance and other factors that go with the territory. The challenges are many, but the more agencies and municipalities can understand the landscape and best practices around payment processing, the more they can meet these challenges and establish reliable and powerful revenue streams.
Finding the Right Solutions in the Cloud
Invariably, organizations go online in search of Software as a Service (SaaS) solutions. That is a good step — an acknowledgement that on-premises management of the payment ecosystem is virtually impossible in today’s demanding environment of consumer expectations, strict compliance and the need to operate at scale.
However, government decision makers are increasingly realizing that the cloud is a crowded marketplace, and not all SaaS options are created equally. Fortunately, the right solutions can be found if you do your homework and set some priorities when shopping for SaaS payment solutions. Here are a few market-savvy considerations to keep in mind:
- Security — The more you learn about what goes into secure payment processing, the more impossible it seems to do it yourself, and the harder it can become to trust a third party to do it for you. Strict compliance rules cover the entire payment ecosystem — including the encryption of devices, the tokenization of processors, merchant of record documentation and more. Some SaaS payment solutions only cover part of the process, which can leave clients vulnerable for any weak security link in that chain, as well as on the hook to hire additional security assessors to retain compliance. The best SaaS options will handle end-to-end management of the payment process and offer what you might think of as “compliance as a service” — taking responsibility for the whole process and the tough security and liability standards that come with it. In particular, look for vendors that can maintain Payment Card Industry Data Security Standard (PCI DSS) Level 1 Service Provider certification, the gold standard for payment data security.
- Customization — Governments seek to project a consistent brand identity. This can be a challenge at the local level — where a county government, for instance, must distinguish itself from neighboring counties, as well as from state and federal government. The online experience is a great way to reinforce your government brand but can be undercut if constituents looking to pay for services online are suddenly sent to a generic, PayPal-style platform. Ideally, you should find a SaaS solution that integrates visually and functionally with the rest of your online environment. This helps keep citizens engaged without adding to your marketing or web design staff’s to-do list.
- Self-Funded Fees — It is impossible for government to upgrade payment processing capabilities if the cost of doing so cuts too deeply into revenue. Fortunately, the best SaaS vendors do not charge government anything and, instead, fund operations from reasonable fees passed on to the citizen. These transaction-based service fees go toward hosting, maintenance, end user support, marketing and system enhancements. NIC pioneered the practice in 1992, and it’s understandably become the go-to option for SaaS payment processing for vendors and clients alike.
- Industry Leadership and Trusted Advice — The world of online payment processing is one that’s complex and constantly shifting. Regulatory rules are always changing, and federal, state and local statues are not always aligned. Payment methods themselves continue to evolve — the phasing out of swiping credit cards, for instance, in favor of EMV “chip and dip” technology. Each time laws or methods change, there’s a ripple effect on processes, policies and liability risk that’s hard to keep up with. Finding a SaaS payment vendor that’s well established and well-versed in the industry, is a key first step. NIC, for instance, serves on the board of the PCI Security Standards Council and on the industry’s main EMV working group, and has policy experts working in more than 30 states. But whatever your SaaS choice, the relationship should feel like a partnership with a trusted advisor.
Choosing the right SaaS partners can totally transform and simplify how government processes payments. As an example, let’s take a closer look at an initiative to coordinate payment processing for the Register of Wills offices spread across two dozen counties in the state of Maryland:
The Register of Wills (ROW) offices in each county operate financially as 24 independent entities under a common set of rules and procedures. Payments to ROW offices include inheritance tax, interest, fees, penalties and other costs. Unfortunately, before a 2014 NIC initiative to integrate ROW payment services into the offices’ document management system, customers could only pay by cash or check. Also, they didn’t have the ability to order, purchase and receive probate-related documents in real time from their web browser. Instead, they had to remit payment and provide a self-addressed stamped envelope — and wait for weeks or more to receive their requested documents.
A pilot program of one county grew to 10 counties — allowing customers to remit credit card payments online and over the counter. Eventually the program was adopted by 22 counties and now includes payments for documents ordered from the ROW. The solution featured a fully hosted SaaS payment engine that significantly reduced the PCI compliance burden and cut costs for each individual office. This streamlined financial reporting at the program level, county office level and payment channel level. All the while, financial audit risk was reduced because funds were no longer handled by staff.
The efforts around this use case paid off handsomely for the ROW offices. To date, more than 27,000 transactions have been processed, garnering more than $1.1 million dollars in statutory fees electronically disbursed directly to each county’s specified bank account.
Payment processing is perhaps the most visible sign of a government’s ability to work effectively and serve constituents. It’s a high-visibility function that also happens to be high value for agencies and municipalities — provided they can harness the opportunity with the right technology solutions. As more and more of those solutions appear off premises, government leaders owe it to themselves and the citizens they serve to understand the cloud — and what it can do for flexibility, speed to market, revenue and — ultimately — constituent services.
NIC is proud to be a trusted payment processing partner for state and local governments for 26 years. To learn more about how your government can improve payment processing through a trusted partnership with NIC visit http://www.egov.com/Payments.