Perspectives 2019 2020 Public Sector

Citi Perspectives 35 Improving Public Sector Collections Gary Schneider Kunal Bist New domestic and international receivables tools will improve the experience of governments and public authorities collecting funds globally. Integrated and automated presentment, payment and reconciliation simplifies the end-to-end receivables journey while also reducing complexities for citizens and companies initiating and executing transactions. Governments around the world receive millions of transactions every day to maintain their country’s fiscal balance. Incoming payments — known as receivables — come from businesses and citizens paying their taxes, workers contributing to pension or social security plans, and, in many countries, students needing to repay student loans to public authorities. While most of these payments are initiated in the country where the government is based, increasing international migration means a growing portion now comes from overseas. For payers, sending money to the government has often been cumbersome and, in some instances, expensive. When making domestic payments, individuals may be restricted to using dominant local payment methods, including domestic ACH and direct debit. Yet international payments are even more challenging and costly. Often payers must send funds via expensive wire transfers or through money transfer services and incur further costs when converting payments to the local currency required by the government. This inconvenience is more apparent today due to the introduction and rapid growth of new payment methods. Many of us no longer pay using cash or checks and instead rely on cards or alternative payment methods such as mobile wallets. Against this backdrop, the processes and instruments required to make payments to government entities are seen as overly complicated and in need of modernization. Governments are motivated to make it as easy as possible for citizens and corporates to make payments to them, improving the citizen experience. Likewise, it is in the interest of citizens to repay their student loans and for workers to make contributions to their social security plan. Moreover, many governments want to eliminate the expensive and time-consuming manual, paper-based processes that are often associated with existing payment methods.