Technology has streamlined almost every aspect of society over the past few years and new payment services have been instrumental in changes to population behaviour. Whilst access to cash payments remains of vital importance to many sections of society, there is an undoubted shift too towards digital payments including recurring, subscription-style transactions.
To keep pace, local authority payment services have had to evolve as quickly as consumer expectations. Across the country, councils have been gradually closing expensive cash offices and digitising payments to mirror the trends of society, but what other measures can be taken to offer local residents the convenience to which they are now accustomed?
With closing cash offices, residents are making physical payments at their local shop via systems such as PayPoint or the Post Office or, if they want to pay remotely, via direct debit or through the council website. These latter options are increasing in popularity but, in preparing for the future, local authorities must take measures to ensure people who rely on cash aren’t penalised during the transition.
The answer lies in a system that straddles both the digital and physical worlds. For example, local councils in Enfield, Lichfield, Maidstone and Norfolk have all recently adopted an approach that allows citizens to pay their bills with cash or electronic payments, through PayPoint’s network of convenience stores spread across the local community. In doing so, the councils are liberated of the financial responsibility of running cash offices, while residents can pay bills in a way that suits them at outlets with long opening hours.
This flexibility has never been more important. If the coronavirus lockdown has taught us anything, it’s that the future of local authority payments needs to facilitate the immediate disbursement of cash, a capability that has been growing in importance alongside the decline of free-to-use cash machines. In fact, in the current and unprecedented climate, we’ve seen enquiries into cash disbursement increase six-fold as local councils make plans to ensure their most vulnerable residents have access to emergency credit.
Technology will also help to make payments simpler for those who are reliant on the services that local authorities provide. Under the introduction of universal credit, people have more control over their money and that needs to be mirrored in the way that councils collect payments from them. Across the UK, we’ve seen a growing number of local authorities deploy mobile-first technology that sends an SMS to a customer when a bill is issued. The customer follows a link to enter their card details and pay their bill at a time that suits them. Convenient services of this nature will grow in importance over the next few years, as local authorities invest in solutions that enable live payment tracking, so everything is seen in real-time and no unnecessary chasing is done.
Another future trend being spurred by technology is the shift from direct debit payments to ‘continuous payments’ used by subscription services such as Netflix and Amazon Prime. They give the consumer more control over their finances, enabling them to cancel payments at any time, whereas when a direct debit is cancelled, the request for funds if often reissued and this generates bank charges for the owner of the account. These administrative headaches can be removed by continuous payments, while also giving more control to local authorities.
To take full advantage, however, upgrades to payments technology will be required so that it is as secure, compatible and accessible as consumer expectations demand. And that’s really the challenge facing the future of local authority payments. In almost every corner of consumerism across the country, people are able to pay for goods and services however, wherever and whenever they choose to. It won’t happen overnight, but – little by little – local authorities are adopting new approaches that will revolutionise the way they engage with the communities they serve.
Danny Vant is client services director at PayPoint