Payments with purpose: payment transformation in the public sector

Payment transformation has become a hot topic for the private sector, but what role does it play in the unique public-sector sphere? We spoke to Helen Young, our Director of Public Sector, Real Estate, Scotland & Northern Ireland, and Thomas Stratton, our Head of Central and Local Government, about how payment data insight can help reduce costs and increase efficiencies across local and national government, charities and not-for-profits (NFPs), social housing and educational organisations.

Is it time to prioritise payments?

“Unlike private-sector businesses, most public-sector organisations don’t have a dedicated payment team,” says Helen. “Without that focus on the power of payments, changing technology, capability and data insight tends to get overlooked.”

The good news is that public-sector organisations are now realising there are opportunities such as digitisation to improve operational efficiency – often without incurring extra costs.

It’s not just individual organisations looking to reap the benefits of change. There’s a national strategy for digitisation to achieve greater agility and resilience. Digitisation can also help further other agendas, such as  those to support local and small businesses more.

A tailored approach to supplier payments

“An important efficiency conversation is around supply chain payments,” says Thomas. “Data provides invaluable insight into who the organisation is paying, how often and how much.”

By analysing the accounts payable data, it’s possible to start understanding the hidden cost of onboarding one-off suppliers or see where there are opportunities for early payment discounts and rebates. From there, organisations can start exploring options and seeing the quantifiable benefits of any changes.

With digital payment processes, reconciliation can be automated to eliminate errors, speed up admin and give managers reporting tools with immediate visibility over spend.

Accepting payments: does customer experience matter?

Our research shows that 68% of leaders see simplicity and ease of payment as the best opportunity to enhance the customer experience.

Charities and NFPs have had to respond to changing consumer payment trends fast. Cash donations are being quickly replaced by preset donation amounts, often taken by unattended contactless card readers. Any friction at checkout can get in the way of good intentions, so many charities are investing in a smoother payment journey.

Similarly, educational organisations know that students are rarely without their phones, making digital wallets ideal for everything from tuition fees to cafeteria payments.

How improved payment experiences benefit the wider organisation

When it comes to compulsory payments such as taxes or social rents, there’s less concern about cart abandonment. However, customer payment experiences have a wider impact. Limited payment options restrict consumers who want to pay quickly using their preferred method. A choice of payment options across channels encourages customers to complete the transaction quickly without needing to get support or be chased – to the benefit of everyone.

“While some larger government agencies such as HMRC have SLAs to track customer experience, the move to a smoother payment experience is less altruistic,” says Helen. “Reducing friction at checkout with instant digital payments reduces support centre calls and the need to chase payments.”