How do Customers Pay Governments for Electronic Payments?

Electronic payments are widely being adapted with the advent of increasing technological sophistication. They make payments easier, convenient, and safe as opposed to cash and check methods. Bulkiness is reduced, and safety is enhanced as people are now learning how to not move around with real money. Electronic payments are recognized as non-cash payments that do not have involve checks. In other words, they can be defined as payments done over the internet and may be in the form of debt, credit cards, or bank transfers. They are convenient in a fast-paced environment and reduce the burden of one having to go to the bank. Moreover, they are beneficial for international transactions since one does not have to be concerned about conversion rates ( DuCharme, 2018). Apart from credit payments, there are other numerous options of electronic payments that are being adopted by businesses across the world. Due to the dynamic financial markets and the changing consumer behavior in relation to ease and technological sophistication, it is more likely that electronic payments will transform the way business transaction is done. Increased online transactions have necessitated the emergence of suitable payment methods that suit both consumers and merchants. Despite PayPal being the current market leader of online payments, increased demand from both businesses and consumers has created opportunities for other options to be opened. New competitors to PayPal are offering cheaper fees, speed, and enhanced security due to the increased cyberattacks. Due become popular due to its cheaper rate of 2.7% and its innovative capabilities of tracking time as well as invoicing ( Toren, 2016). Unlike most of electronic payment systems, global payments occur within a duration of two days. There is also a beneficial component of sending or receiving money across the world with minimal to no costs. The system also provides its users with a user-friendly e-bank that allows individuals to save their money online ( Toren, 2016). On the other hand, stripe has also fascinated users by its ability to permit personalization due to its flexible API. The system integrates with other applications and has no fees of setups, monthly maintenance, or hidden costs. Dwolla is also similar to PayPal but focuses more on bank transfers where users can customize solutions to receive payments within a day. Unlike others, there are no transaction fees. Payoneer is one the oldest systems of electronic payments and allows mass payments to be made across the world. The system is operational in more than 200 countries are permits transactions that have different currencies ( Toren, 2016) . Its flexible API allows businesses to grow and charges no receiver fees in money transfers. Similar to PayPal, the platform responds to security fears by permitting its users to have plastic MasterCard if they are not willing to transact online. Other options include Amazon payments, 2cheout that accepts credit, debit, and PayPal as well as being available in 87 different languages and skrill which has instant withdrawals and deposits with low transaction fees. The options are increasing by filling a niche created or existing in the financial market of online transfers ( Toren, 2016). They are either designed to offer cheaper costs, improve user experience, or provide more security than other forms. Electronic payments attract convenience fees that are absent when payments are made by checks or cash. Given the increased shift towards a cashless society, people will be forced to use credit cards. However, merchants can spread their financial risks by recouping credit card charges to their customers. In this case, a convenience fee is defined as additional costs that customers will pay to be able to use more fitting ways of payment ( Nathanel, Kugler, & Spatz, 2017). The customer will still have the option to use alternative forms of payment that do not have the fees. However, the charges exist to help merchants recoup costs incurred when setting up the new payment channels that ease business transactions. For instance, movie theaters that sell their tickets through the box office often allow customers to pay using credit cards. However, they may offer alternatives that are more convenient for users, such as online orders. Tickets purchased online attract convenience fees to help movie theaters recoup the costs incurred to set up the platform. Convenience fees are beneficial to merchants by helping them to cover costs associated with each transaction ( Nathanel, Kugler, & Spatz, 2017). Costs incurred are often processing fees charged by either banks or companies that own the electronic transfers. Governments fail to understand what drives customer experience since they often do not have the same level of knowledge, research, and analysis as private sector businesses do. Feedback from a simple survey only provides narrow windows where the government could understand its clients more. The government relies on payment methods that are secure with the capability of reducing fraud, even though the technique may not be suitable for clients. In most instances, governments are trapped in the past due to issues in fiscal regulations and resource constraints. Nonetheless, instead of the government focusing on the processing system, they could understand more about how consumers feel when using specific payment methods. Even though governments believe that digitalizing payment processes are expensive and time-consuming, they realize the benefits of electronic systems. Currently, BluePay is the most common method customers use to pay governments ( Payment processing companies serving the government, 2015). The processing solution involves credit cards and employs high-level encryption to protect the data. The payment system is compliant with PCI standards and is often used in level 3 transactions done by government agencies. On the other hand, Chase Paymentech provides payment processing solutions for government services such as education and other public utilities like transportation ( Payment processing companies serving the government, 2015). They also give point-of-sale payments in vehicle registration, property taxes, as well as corporate filling, among others. They reduce the operational burdens of governments by meeting specific needs. Dwolla is also common among federal departments while FIS accepts recurring payments such as water bills or licensing ( Payment processing companies serving the government, 2015). Other modes of electronic payments accepted by the government include GoPayNet, Hybrid Business Solutions, and Fiserv. Payment innovations are increasing as technology grows to meet the growing demand of consumers that seek convenience and ease. Consumer changing behaviors in demanding more value addition and increased competition in the market increase the pace of the evolution of electronic payments ( Luther, 2016). This means that there are more expected changes that will affect how customers will be paying for services to either governments or private businesses. According to Taylor (2016), the digital transformation will increase online applications in users with smartphones and reduce the reliance on cash registries in the retail space. Point of Sale retail is believed to grow in the future due to its time-saving conveniences to both merchants and customers. Therefore, nearly all businesses in the future will introduce electronic payment systems and eliminate the traditional methods of paying for goods and services. In this regard, consumers will be using more mobile applications in the future to conform to the changing retailing space. Consumers will have a wide range of options to choose from when making electronic transfers. From PayPal to M-Pesa and Apple Pay, the emerging payment platforms will be accessible in the financial market. Depending on the convenience and reliability provided, consumers will be able to transact large amounts of money across the globe without having to go to the bank ( Luther, 2016). There will be short queues in banks, and people will be able to transact at the convenience of their homes. Other forms of payment that have emerged and do not take any monetary form, such as cryptocurrency will become popular in the future. For instance, a growing number of merchants are accepting bitcoins alongside credit and debit payments. This means that consumers will be making payments through cryptocurrencies that have attached a monetary value to them ( Luther, 2016). This is because this form of payment provides data security and privacy to its users. They also solve delays and problems in pending transactions as people can cancel transactions easily without the fear of losing money. 

Conclusion 

Digitalization has paved the way for the emergence and continuity of electronic payments. Despite services providers such as the government being rigid to change due to issues in compliance and regulations, they will soon adopt the new payment methods to increase convenience and ease to consumers. The future for electronic future is bold as more innovations are being made. This means that customers will have a wide range of options to choose from when carrying out their transactions. 

References 

DuCharme, B. J. (2018).  U.S. Patent No. 10,163,099. Washington, DC: U.S. Patent and Trademark Office. 

Luther, W. J. (2016). Bitcoin and the future of digital payments.  The Independent Review,  20 (3), 397-404. 

Nathanel, T. Z., Kugler, S., & Spatz, I. E. (2017).  U.S. Patent No. 9,633,344. Washington, DC: U.S. Patent and Trademark Office. 

Payment processing companies serving the government. (2015). Go Medici Insights. Retrieved from https://gomedici.com/payment-processing-companies-serving-the-government 

Taylor, E. (2016). Mobile payment technologies in retail: a review of potential benefits and risks.  International Journal of Retail & Distribution Management,  44 (2), 159-177. 

Toren, A. (2016). The 15 most popular online payment solutions. Entrepreneur. Retrieved from https://www.entrepreneur.com/article/286006