E-payment in government sector growing by 80%
The growth in internet penetration and electronic payments has the potential to improve governance and make it easier for citizens to interact with government agencies and avail of public services. Nitish Asthana, Executive Director, First Data - ICICI Merchant Services discusses how electronic payment can be leveraged as part of e- government programs to improve services to citizens across the country.
According to Asthana, e-Governance, although a comparatively recent phenomenon, has seen considerable progress in the online provision of government information to citizens. He informs that the services where e-payments have made significant progress are utilities (electricity, water and gas), rail transportation, education, taxes and municipal dues.
Ashtana believes that consumers experience tangible benefits by paying for services online. They no longer have to visit multiple government offices or stand in queue to pay their bills or seek information. Rather, this very convenience has led to rapid adoption of online payment modes.
The government benefits from making available consumer-centric services online. This ensures that the necessary process controls are not compromised, productivity and efficiency are increased, and customer service levels are improved. Handling large amounts of cash is known to increase pilferage and fraud, which are both reduced by electronic payments that also keeps manual intervention to a minimum. This makes the service almost completely error-proof and improves financial reconciliation.
E-change is here to stay
Ashtana gives the example of Indian Railways as one of the biggest beneficiaries of online payments. Today, online railway ticket booking on its website is a success story. This year, the Indian Railway’s website set a new record by booking over 5 lakh tickets. This service gives consumers several e-payment options, including debit and credit cards. By the end of this year, the site will is estimated to handle 1.2 lakh users at any point compared to the current 40,000 users it handles, he says.
Online tax submissions have increased significantly as more than 25% of tax returns are now e-filed. Municipal dues are increasingly being paid electronically and a large number of public service jobs can be applied for online. Most electricity and water boards accept online payments through debit cards, credit cards and net-banking. More and more government educational institutes are providing fee payment options on their websites. Even the public distribution system is piloting a closed-loop payment system of distributing and procuring material and inventory over a widely distributed network.
Overall, card payments in the government sector are growing by more than 80%. E-payments will be the future and a driving force behind the vision of a less-cash economy. The change is everywhere.
Taking the next leap
Ashtana believes as consumers demand more and more government service online, public departments must work closely together to replicate successful e-payment models that work in other departments or geographies. With lower transaction costs being prescribed by card associations (Visa, MasterCard), government departments should take advantage of the lower cost of processing electronic payments.
Banks, acquirers and payment gateway providers have an important role to play in enhancing the convenience, speed and safety of providing e- payments. These service providers need to make available a comprehensive set of payment options on the department’s website such as credit card, debit card, net-banking and Standing Instructions, he says adding that strong analytics is required to provide the government merchant with robust accounting and reconciliation.
Ashtana also states that with wireless internet access and broadband becoming the standard, government agencies should capitalize on the web’s reach to provide consumers with more convenient payment options. E-payments in government services can grow manifold when public authorities cooperate on a nationwide basis to replicate success stories. The core objective must be to simplify and speed- up transactions whilst keeping them secure. E-payments in government are central to the less-cash effort.
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