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Improving operating cash flow through strategic partnerships.

Improving operating cash flow through strategic partnerships.

Emmanuel Alfieris  ●   26 September 2016

As payment systems in the private sector become more sophisticated, customers expect a fast and seamless payment experience. How can the public sector deliver a comparable experience — and improve their operating cash flows and operational processes at the same time?

Today, service delivery is about speed and convenience. Large private sector organisations have been leading the charge in enhancing the customer experience and their cash flow through payment innovation. This innovation enables organisations to capture valuable data, giving them fresh insights into customer behaviour and providing a much more accurate overview of their operating cash flows.

In contrast, government agencies have traditionally lagged behind in the payment space, held back by cost restraints and cumbersome processes. But there is a way for government to provide a comparable payment experience without compromising its integrity.

The payment revolution

Technology continues to revolutionise the way customers make payments. In the first wave of innovation, customers gained the ability to pay bills online, instead of queuing to pay face-to-face or sending a cheque in the mail. These days, banking data reveals that customers are favouring apps and mobile devices over traditional websites, thanks to their simpler and more flexible payment experience.

Innovation is also changing the way that retail and hospitality businesses collect and manage payments. From portable devices that allow retailers to collect payments on the shop floor, to apps that make it easy for to split bills or calculate tips, new payment solutions are raising the bar on customer experience.

As digital payment methods become the norm, customers faced with barriers like long queues, or complex online payment processes are likely to put off paying bills. Delayed payments mean that valuable operational cash flow remains tied up. It also creates extra inefficiencies, as staff need to chase customers for payments.

Leveraging existing infrastructure

The technical infrastructure, capital and in-house expertise of large private sector organisations allows them to continually innovate in the payment space. While the public sector has made huge strides in efficiency — especially in their ‘one stop shop’ approach to service delivery — without the funding and agile infrastructure of the private sector, it is at risk of falling behind.

So what’s the solution?

One approach is for government agencies to leverage the existing payment solutions of larger organisations, such as banks. This will enable the sector to provide faster and more convenient payments, without a large up-front investment.

For example, using mobile payment devices powered by apps, such as CommBank’s Albert device, government departments could process payments quickly online from locations away from the central collections desk — opening up greater flexibility for customers, and bringing in payments faster. Or to take it a step further, app-based systems could be downloaded by the customer to their own device — making it easy for them to pay instantly from wherever they are.

An example of how the public sector can leverage existing payments infrastructure is Gold Coast City Council where they created an App using open architecture that is now available across all Council offices payment devices.  This allowed all citizen facing centres to collect payments on behalf of the Council, from the Council Chambers to the local libraries.

The benefits

While improving customer experience is a key benefit of this partnership approach, leveraging the more sophisticated payment systems of larger organisations can deliver additional benefits to the public sector.

Faster, easier payments will lead to greater efficiency and productivity, as less manual intervention will be required. And, by being able to collect revenue more quickly, governments will also have faster access to valuable operational cash flow.

A payments infrastructure that can share information across the public sector can also give governments a more holistic view of an individual citizen or business. For instance, a business may have obligations to pay payroll tax, corporate registration fees and registration for its business vehicles each year. By having the ability to see the business’ obligations as a whole, the government could potentially streamline their engagement with the customer, by requesting a single regular payment. This could help prevent late payments when all the bills for the business arrive at once, while improving cash flow for the business and government alike.

Additionally, with access to more sophisticated payment facilities the government will be able to better identify their customers, avoiding errors and increasing the integrity of government. For example, by having a consolidated view of each entity, government can avoid errors like making overpayments to a business that appears under more than one name.

Find out more

For a confidential discussion about working capital solutions for your agency or department, talk to your relationship banker today.

Emmanuel Alfieris
Emmanuel Alfieris

Executive Director, Health, Education and Government

Emmanuel Alfieris is an Executive Director with Commonwealth Bank’s Government, Health, Education and Social Infrastructure Group.