Dec 13, 2018 Dave King
The use of electronic payment systems has been on the rise in the United States among consumers in recent years. With the advent of the smartphone and proliferation of e-commerce portals, more Americans are starting to make purchases on digital mediums than ever before.
Although cash and checks are still used frequently, the use of electronic transactions continues to increase, and it's likely that the channel will surpass other payment methods in the coming years. Not only are they extremely convenient, they can be cost effective. For this reason, businesses and government organizations in the U.S. should consider implementing such technology.
According to a recent report in The Record, the New Jersey Senate is considering a bill that would bring electronic payments to the state's court system. The source noted that, if passed, the pending legislation would allow for court fees to be paid electronically via an online payment systems that would be set up by the courts.
The reason for the move is most likely a result of a desire to reduce expenses, rather than convenience. Although some consumers and government officials often associate e-payments with fees and interest rates, the truth is that electronic systems can significantly reduce the cost of maintaining, organizing and processing payments.
Mexico provides an example
The Better Than Cash Alliance recently released a report highlighting the major cost savings seen by Mexico's federal government after it digitized its payment procedures. According to the source, Mexico was able to reduce fee-related expenses by $1.27 billion per year by embracing an electronic payment system for payroll, pension transactions and other fiduciary exchanges.
If the same strategy is adopted by American government organizations, similar cost savings might be seen. This would not only make these bodies more efficient, it would free up additional funding in the federal budget to spearhead other projects. In a period in which sequestration and spending cuts are the norm, switching to electronic payments could prove to be a respite for groups that have seen their funds limited in recent months.
Although implementing such a change may require a long approval process, it's a worthy endeavor for the American government to embark on. As electronic payments continue to gain popularity in the private sector, the tools and technology that power these channels will likely become more efficient. This is why public groups should also be willing to embrace e-payments in the coming years.