Modernizing the Government Payment Processing System


Government agencies play critical roles in keeping the economy in balance and fostering the growth of our country. But for many years, the same agencies that we rely on have few payment processing options.

In fact, many of them are still using outdated methods that make processes slow and less efficient than if they were to adopt newer innovations that high-risk merchant account providers can offer.

But things could change soon thanks to an executive order released in December 2021, stating that this long-standing issue among government agencies needs to be addressed. Customer experience, especially in payment processing, is a priority.

How payment processing looks like now

When tax-paying Americans take advantage of federal services, they expect efficiency, speed, and equitability, but that’s not the case.

Perhaps no other person knows the situation better than NIC Federal Vice President Danielle Schefer, who has previously worked with the government to help modernize financial and taxation systems alongside her family’s IT services company that supported government agencies like the Internal Revenue Service.

She explained: “Agencies are always looking for better ways to do business. They need to accept payments and they want to provide an optimal payment experience. But the free technology payment tools federal agencies often use don’t deliver the type of user experience that constituents expect.

Sometimes, the tools promoted as ‘free’ do, in fact, come at a cost. Perhaps manpower-intensive backend reconciliation has not been considered or on the frontend with customer needing to navigate a labyrinth of choices.”

The outdated technology makes it harder for citizens to enjoy a positive customer experience, especially since they’re used to the fast and seamless technology offered by private companies online.

How payment processing could be improved

With her knowledge and experience in government payment processing systems, Schefer proposes some changes that could help the government offer a more positive customer experience to its citizens.

A digital payment processing platform similar to what private entities are offering could be a great start, although it would take some work to make it more fitting to the services offered by government agencies.

The NIC Payments platform solution will hopefully change the future of payment processing for federal services. Schefer explained: “Especially during the pandemic, our payments platform has provided a way for citizens to safely and securely complete necessary transactions with the government online. For agencies, the platform delivers a simple and intuitive payment experience while providing the government with the necessary tools to securely engage, transact, and disburse funds, often at little or no cost to the government.”

Although the Post Payment Modernization Initiative will take a lot of work and collaboration between the government and IT firms, creating a digital payment processing platform for government agencies will allow more efficiency in the delivery of services. It will also offer a more positive experience among tax-paying citizens.

As Schefer and her team work on revolutionizing the government’s payment processing system, we can look forward to better things in the future.

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