Tapping Into Municipal Government Payment Trends

 

Over the past few years, most—if not all—state governments have followed the federal government in its efforts to digitize payments. Now it’s time for municipal governments to step up to the plate. With this in mind, E-Complish takes a look at key municipal government payment and payment acceptance trends to keep in mind for 2022 and beyond.

1. Demand, demand, and more demand

Consumers clearly crave the ability to make digital payments to their local government. A vast majority (93 percent) of individuals queried for a study by Logica Research and PayPal said all governments, including municipal governments, should offer this option, and almost as many (88 percent) said they would handle their municipal bills electronically if their local government gave them a way to do so.

These statistics reflect the views of consumers in a wide breadth of age groups, ranging from 18 to 75 years old. So clearly, demand for digital payments is not limited to younger (Millennial and GenZ) consumers; it is now becoming common among members of other demographic groups, including, but not limited to, Baby Boomers.

2. Choice is king

Increasingly, consumers want access to multiple digital payment methods not only when it comes to shopping, but when it comes to all types of payments that are not paper-based. According to McKinsey & Company, the number of consumers who fall into this category now exceeds 50 percent and is rising rapidly.

A report by U.S. Bank indicates an uptick in the popularity of ACH, mobile, and web-based technology for government payments. The same is true of technology that enables interactive voice payments. Moreover, the report brings to light heightened interest among consumers in electronic bill presentment and payment (EBPP)—in other words, in receiving municipal tax and other bills in electronic format and paying them by clicking a link.

3. Opening wide for wallets—digital, that is

The push for digital wallet payment acceptance by municipal governments is hardly surprising, given marked spikes in and projected growth of consumer spending via digital wallets. According to Juniper Research, such spending will exceed $10 trillion in 2025, up 83 percent from the $5.5 trillion in digital wallet spending reported in 2020.

Equally, if not more telling, more than half (51 percent) of citizens who participated in Accenture’s Citizen Survey expressed a desire to use a digital wallet to complete transactions with any government entity. That was in 2019—and recent commentary from the research and consulting firm stipulates that in light of consumers’ significant digital engagement with merchants and service providers, this percentage is likely to be far higher now.

Further evidence that the trend toward digital wallets in the municipal sector is taking hold: Participants in the Logica Research/PayPal study said they would make 3.5 times more payments for park and recreational facilities usage fees with a digital wallet, as well as three times as many court fines and tickets, if they had an opportunity to do so.

4. Overwhelmingly omnichannel

In Forrester’s 2022 predictions for the public sector, analysts note that, “Consumers are the new market-makers”—meaning that they want 27/7 access to government services, including municipal government services, from anywhere and any device. This means that in addition to a varied menu of payment options, like those named in #2 above, they want to be able to request services and complete payment transactions using the same portal rather than toggling between and searching through multiple pages on their municipality’s website.

Just as importantly, consumers who have access to a web-based payment portal wish for that portal to serve as the origination point of all their digital payments. This runs the gamut, from taxes, court, permits, recreational programs, and licensing (e.g., dog licensing) fees to utilities (e.g., water) and sanitation services. The benefit for municipalities transcends labor and cost savings to also include improved citizen engagement.

E-Complish’s payment processing solutions and services can help municipal governments tap expand their menu of payment acceptance options. Learn how, and/or schedule a consultation, here.