WBG
- | December 11, 2023
Mia Ryan, Isvary Sivalingam and Gisela Davico-Thaler
Our previous blog reflected on learnings from engagements with member countries on tax digitalization.
Now, we explore the digitization of non-tax revenue people to government (P2G) payments. The digitization of non-fiscal P2G payments includes utilities, license fees, passport processing, and identity verification, and is increasingly important to reduce transaction costs and provide faster, more convenient, and transparent services for citizens.
Perhaps surprisingly, our members’ P2G payment digitization journeys have shown that technology itself is ultimately only one factor in achieving success. Enabling policies, clear processes, and user-centric products are, however, crucial. From our work on water utility payments in Ghana, we learned that user trust can be built through accurate and timely billing; transparent and verifiable transactions; and quick and responsive recourse mechanisms – all ideally supported by an automated customer relationship management (CRM) system. A robust and comprehensive change management process is also key to onboarding both internal and external stakeholders in the digitization journey.
Overall, three key learnings emerged from our engagements:
Active coordination among stakeholders can help reduce transaction costs and enhance operational efficiency, but roles and responsibilities must be clear for all. In Colombia, the Boton PSE is a platform developed by the banking sector and a private clearinghouse, ACH Colombia. Users pay for goods and services online, transacting directly with bank accounts. This is an excellent example of public-private collaboration to provide payment solutions for various purposes like municipality taxes and fees, utilities, and taxes in general.
In 2019, the Central Bank of Mexico (Banco de México) launched CoDi, a digital payment platform that uses a quick response (QR) code to generate a digital payment. The transaction occurs directly to/from the parties’ bank accounts, without intermediaries, and free of charge to both. By aligning with state and local government payment policies and connecting with local banks, CoDi allows people to pay for government services like water, electricity, and taxes.
In Rwanda, Irembo offers over 100 services from 20 government institutions, and is a one-stop digital platform for citizens covering service application, payment, application tracking, and processing. It gives access to over 4,000 network agents across the country, and has helped to accelerate the digitization of P2G payments in Rwanda, with over 17 million transactions already recorded.
Providing choice in payment methods also improves users’ experience and encourages adoption. In 2018, the treasury of the Dominican Republic launched SIRITE, a payment platform to receive, centralize and record public revenues more efficiently. Users can pay for passport renewal fees, register real estate and certify education records, among other public services. This cost-efficient gateway also accepts debit and credit cards, enabling users to choose their preferred payment option.
Clearly, successful digitization of P2G payments and its widespread adoption by users is achievable – but depends on the alignment of various important factors. An effective change management system is crucial, as is securing buy-in from staff and ensuring that all segments of users are included in the transformation, so that digitization is truly inclusive. Shifting from cash requires a compelling value proposition, and that can be realized by implementing the UN Principles for Responsible Digital Payments throughout the digitization journey.
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