The Benefits of a Unified Digital Government Payment System

Tyler Tech Podcast Episode 103, Transcript

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Show Notes

On this episode of the Tyler Tech Podcast, we explore the evolving landscape of government payments with Tyler's vice president of payments, Morgan Jines. With experience in both payments and government, she shares her expertise on the latest advancements in payment technology and its impact on the public sector.

Morgan discusses the benefits of a unified payment platform, emphasizing how integrating payment systems across departments can streamline processes, improve efficiency, and enhance the user experience for both constituents and internal staff. She also details the challenges governments face with fragmented payment systems and how modern technology can overcome these hurdles, particularly in terms of security and compliance.

Drawing from a recent research study conducted by the Center for Digital Government, in partnership with Tyler Technologies, she offers practical advice for agencies looking to modernize their payment systems, highlighting the importance of evaluating current processes and prioritizing key needs. Whether you’re grappling with integration challenges or seeking to enhance payment security, this episode provides valuable insights and strategies to help agencies navigate the complexities of digital payments.

We also detail our latest white paper about the five main risks of legacy systems. You can download that here: Is Your Legacy Digital Infrastructure Putting You at Risk?

Learn more about the topics discussed in this episode with these resources:

• How to Create a Unified Digital Payment Experience
• Research Report: Seeking a Modernized Payment Experience
• A GovTech Thought Leadership Paper: Driving Financial Equity With Technology
• Infographic: The Government Payment Deficit
• Blog: Transforming Government Payments: 2024 Research Insights

Listen to other episodes of the podcast.

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Transcript

Morgan Jines: I am definitely a data analytics nerd. I love the numbers, and I think that I've seen, you know, as fraudulent actors get smarter, we have to, not should, we have to, right, leverage AI.

Josh Henderson: From Tyler Technologies, it's the Tyler Tech Podcast, your source for insightful conversations with thought leaders addressing the pressing issues in our communities.

I'm Josh Henderson, and I'm on the corporate marketing team here at Tyler. Thanks for joining us. In each episode, we dive into the essential topics shaping our society and shed light on the individuals, places, and technologies, and powering the public sector.

If you like what you hear, please consider giving us a five-star rating and review, subscribing on Apple, Spotify, or wherever you listen to podcasts, and recommending the show to others.

On today's episode, we're joined by Tyler's vice president of payments, Morgan Jines.

Morgan's extensive experience has focused on delivering cutting edge payment technology solutions to the public sector with an emphasis on improving both payer interactions and operational efficiency. In this episode, Morgan shares insights from a recent research study on the government payment experience, exploring how a unified payment platform can change the way agencies handle transactions.

She explores the benefits of integrating payment systems across different departments, the importance of a seamless user experience for both constituents and internal staff, and how modern technology can simplify security and compliance requirements.

With a deep understanding of the evolving landscape of government payments, Morgan offers practical advice for agencies looking to modernize their payment systems without sacrificing efficiency or security.

Whether you're grappling with fragmented payment process or seeking ways to enhance your agency's reporting or payment security, this conversation is packed with valuable takeaways.

We hope you enjoy the episode.

Alright, Morgan. Thanks so much for joining me today on the podcast.

Morgan Jines: Thank you, Josh. Happy to be here.

Josh Henderson: So, I wanted to start the conversation with a bit of your background. So, if you could just walk our listeners through your career journey up to and including what you're doing now, sort of in the payments space here at Tyler.

Morgan Jines: Happy to do so. I have spent my entire career in both payments and government, so the best of both worlds.

Very quickly out of college, I knew that I wanted to leverage something that was both financial services related and a bit of technology just because there was so much heightened focus on that and how we could bring the two together. So, my first role was in government leading, the payment strategy, which is very different than what payments was now as we know it. And it was just really trying to determine how do we get an embedded software experience, to local government within a very specific market. More localities, not state level. And so, I did that for about seven years, and then, the other side of the coin was just a pure play payments company. So, transition to learn more about payments, working for a payments company, specifically servicing, both government and health care, technology companies. And so, both those experiences gave me different views of financial services and technology for government.

And then most recently, joining Tyler as our vice president of payments, really trying to understand our strategy for both locals at the state level, at the federal level, and then how we can bring modern technology and services, digital wallets, things like that, disbursements to all of our different players, that we have in our clients. And as you know, we have a lot of different Tyler software products that enable payments, but then we also support standalone payments and enterprise payments to government agencies that maybe don't have Tyler products. And so, a lot of strategies involved with that. And so, trying to organize all of our technology and our teams to understand, the best go to market to deliver a good client experience.

Josh Henderson: Obviously, a lot of payments experience for you. So, we're obviously going to talk about payments and the world of payments quite a bit today during our conversation, including this concept of a unified payment system, as well as research findings from the Center for Digital Government, that was done in partnership with Tyler. But first, I kind of wanted to explore more generally the idea of modernization as it relates to payments.

For government agencies looking to modernize their payment systems, what are the best practices to ensure a smooth transition that benefits both residents and staff?

Morgan Jines: So, this is you can imagine looks a little bit different for all different types of government, because they operate very differently. But I think some just key things to be aware of is evaluating what that landscape looks like. So, trying to understand how each service or department within the city or county, how are they set up today? What do their business processes look like? So really understanding an inventory of not just their payment solutions that they have, but an inventory of their own processes. And so, you know, for finance, that might look like how do they perform audits? How do they support the financial reconciliation?

But then for the IT side of the world, that might look like how are they adhering to PCI compliance and what are some of the compliance requirements around the cloud. And so, it's really, you know, trying to understand what's important to everybody involving those key stakeholders.

And then before you start determining who would be best in partnering to understand those needs, prioritizing what the needs that you have are across your key internal stakeholders. And then whether you make that decision to go through a formal procurement or start doing evaluations of different vendors, always making sure that you have those table stake requirements in mind and your priorities.

And then when you're looking at demonstrations, those would be ones that you would certainly make sure that that everyone is checking those boxes for. And then even with that, you know, maybe there's some what does the future forward look like for us. And so, I would also, you know, just recommend making sure that you choose a government payments partner, kind of touching on being involved just a little bit of health care. In my previous role, the requirements for health care would be very different, right, than with government. And so, understanding the importance of a government partner will certainly help drive forward the overall vision for that government.

Josh Henderson: It's really great advice.

And now as I mentioned earlier, we kind of want to jump into the survey findings as well from the Center for Digital Government.

The survey mentions an evolution in how agencies approach payment systems.

What technological advancements are driving this change, and how are they sort of reshaping, the landscape of government payments?

Morgan Jines: Most of this is constituent driven. And so as we see different demographics come along that start to have homes and start to pay utility bills or buy business permits, they have different expectations for how they pay.

So, one of the first ones that I think of is digital wallets. And then being able to make that payment directly from their phone or with Apple Pay. And so that certainly is one aspect of it, and I think the other one is just ease of use.

So, if the same individual needs to pay both their animal license, business license, their taxes, they wouldn't want to have to go to two or three different places to do that. They would be looking for one portal or one place within their phone that they could go and take care of all these things at once. Maybe they even want to manage payment plans for an aging parent. So, I would say constituents are really driving that.

Then the technology and the ways that we can pay are continuing to grow. And so being able to adopt those different payment methods is certainly driving a lot of the government demands to be able to offer that to their citizens and constituents as well.

Josh Henderson: So, sort of evolving as the constituents' needs sort of evolve in the space, is definitely important. Many local governments still use multiple payment vendors across different departments. This lack of integration with existing software, payment and financial management system, it's often cited as a key challenge.

How can technology empower governments to effectively overcome these integration hurdles and still deliver a seamless payer experience?

Morgan Jines: And it is a huge challenge. And that survey, you know, one of the top items of importance was integration, and there's a few different reasons for that. One problem with having disparate systems become the complexity of having data in different places. And so, you have different sources of truth and not a single source of truth, and that really creates a challenge for you think back to accounting and auditing. If they're having to go to multiple places to feed data to their auditors or they're having to manage all of that data to search for payments, to search for transactions, it creates a lot of time, that they have to work through, you know, for both their internal processes as well as if they're trying to help a citizen or constituent that has come in and asked a question.

And so having whether it's an ERP system or a tax system, whatever system of record that is, having all of those be fed through one single source of truth is incredibly important to be able to remove those disparate systems and just improve not just the accuracy of the data, but the timeliness as well, because being able to perform tasks more quickly, helps both our internal and external customers.

Josh Henderson: So, less headaches for the constituents, less headaches for the agencies.

It's a win win.

So Unified Payment Solutions, they're highlighted as a way to standardize both constituent experiences and back-office processes. What are the potential risks and rewards of moving to such a system in your opinion?

Morgan Jines: I think that the risk is that it is a large undertaking to be able to do in the in the first point what are some recommendations to be able to go through evaluating all of your systems and not just evaluating them, but prioritize them and really do your own analysis before you even get to the process of trying to understand the market and go through demonstrations. And, you know, we have seen, in the time that I've been at Tyler and even before, more and more cities and counties are going to formal procurement, to bring together a unified payment platform and have one vendor provide all of their payment needs. And I think there's some things, you know, that that stick out in some of these RFPs that we've seen, and it is really focusing you know, that integration, the security, the simplicity for the payer.

And so, there's certainly that time investment, which is a risk. And then I think also, once you choose one, when you are upending all of the current systems then you're going through the implementation phase. Like, with anytime technology is involved and data is involved, there is a commitment to get that across the finish line. And so, I think the risk is certainly all of those resources that are invested and then the data that will be transferred ultimately to the new provider.

But the reward of it is certainly all of the I think just we talked about, the payer expectations and delivering that to them. But internally, bringing together all of these systems, it cuts down on administrative costs, it helps the networking and security staff because they're not having to manage, specifically if you're deploying your new platform in the cloud, which we're also hearing a lot about as it pertains to payments. So, you're moving to one provider.

You're moving your software and all of your data to the cloud. Well, then your IT and your security folks that are managing that part, the things that they're doing for PCI are minimized. And certainly, also for their SOC two requirements and, you know, being able to deploy things in the cloud. You know, as you know, we are partnered with AWS for that.

And so, it's, you know, it's choosing the right strategic partners that enables us to bring together all of the rewards.

And then I think, secondly, besides the internal processes, the rewards is also this is an evolving industry. And so, with payments, there's constantly new, mandates that are coming through for banking requirements, for cardholder data requirements in terms of tokenization and protecting that cardholder data. And if you've chosen a vendor that, you know, is within government specifically, you're not constantly having to look out for these requirements and these mandates and determine what new processes do I have to implement, who you know, which vendor do I need to choose for this. And you have someone that's really there, you know, shielding you from that and also modernizing and maintaining that compliance with their technology that you've implemented. And so, it's very much a future forward, future proof, preventative that you're installing as well, which is very much reward.

Josh Henderson: Stay tuned. We'll be right back with more of the Tyler Tech Podcast.

I hope you're enjoying listening to this episode of the Tyler Tech Podcast.

I'm here with my colleague Jade Champion, to talk about the importance of tech modernization.

Are you struggling to maintain your legacy systems? There might be time for a change.

Jade Champion: That's right, Josh. We just released a white paper that outlines the five main risks of legacy systems and the benefits of modernizing your digital infrastructure.

Josh Henderson: From security weaknesses to inefficiencies and high maintenance costs, legacy systems can really hold back government agencies. So, what are some of the benefits of future proofing with an updated tech stack?

Jade Champion: Modern cloud-based solutions help to streamline processes, protect against cyber threats, improve the resident experience, meet compliance requirements, and provide more scalability.

Josh Henderson: Are you ready to leave your legacy systems behind and improve your digital services?

Check out our show notes for resources to help you get started and reach out to us at podcast at tylertech.com to connect with a Tyler expert today.

Now let's get back to the Tyler Tech Podcast.

So, we've talked more generally about the benefits of a unified payment system. But for agencies that have transitioned to a unified payment system that you've seen, what are the immediate and the long-term impacts that they've observed, that you've observed on both constituent satisfaction and operational efficiency?

Morgan Jines: I think one of the immediate ones is certainly an increase in payer adoption. And so, when you are adding, the ability to pay all of the bills or get registered licenses or your tax refunds and all of these things, you are having better engagement with your community and ultimately increasing, you know, the reputation and the trust in your community and your brand.

But certainly, the increase in adoption from being able to set up recurring payment plans for your utility bill being able to manage, multiple different payment plans with cards on file and not having to walk into an office and pay for a certain bill or for register for licenses. So, you'll see an increase in adoption. We recently had a client that went live and with an end-to-end transaction management platform that was all unified and increasing that adoption and customer satisfaction was certainly at the top of the list. And so, these types of things are becoming table stakes to be able to have alternative payment methods, to be able to have multiple cards associated with one account.

So that's certainly an immediate increase, in satisfaction. And then on the operational side, being able to take tasks, for reporting financial reconciliation by having one single source of truth. It saves so much time, and I have to think about in payments.

You may have, some departments that have different business rules than others across one city. So, you may have, some departments that have to pass on those payment fees, and then you may have others that absorb them. And that's the rules that they have, and they can maintain those different rules, still have one integration and single source of truth, but then the reporting is all maintained still through one single pane of glass. And so, I think the importance of that being able to have, like, a rollout view, you know, just imagine a single dashboard that shows your adoption, that shows, the payouts and batches for a single day across departments.

But still, each department was able to maintain the integrity of their business processes is incredibly important and valuable.

Josh Henderson: And, you know, we can't talk about this, the digital payment space, without obviously talking about security. That's hugely important in this space. It's people's livelihoods. It's people's money we're talking about. So, how can agencies sort of ensure they're maintaining these robust security measures without compromising on usability and convenience for their residents?

Morgan Jines: And I think this goes back to having, you know, a strategic partner specifically in government because, when you're dealing with people's money, there are so many, different councils that are involved beyond, you know, the city or county's ownership. And that's I think, for card data, I think of PCI DSS.

And for ACH or eChecks, I think of Nacha, and there's constantly new mandates that are coming along to protect cardholders' data. And it's your job as a as a local government to implement either of these processes yourself, which oftentimes means relying upon the upon a strategic partner.

And so, once you have that strategic partner, I think ask questions. Make sure that you understand from an auditing perspective what is my role in this equation. So, an example is recently, PCI 4.0 was released, and there's an additional requirement if you're processing, a certain number of transactions, which is to have an additional, scanning, so ASV scanning. And, at Tyler, we have deployed our role in that and how that will impact our partners, and we've taken care of that, through our strategic partnership.

But for others, it would be that question of if okay, how are you solving for PCI 4.0? What are my requirements? When do I need to bring in my quarterly stands? How do I do that? There are self-questionnaires with PCI.

And so, do I do I have to provide these, or is it my strategic partner? And so, everyone plays a role in this chain of command or security, but it's asking those questions and understanding your role. And then, secondly, once you have your strategic partner, making sure you choose someone that has clearly conveyed your role, their responsibilities, and then acts on that plan as well.

Josh Henderson: Those are really great insights. And now, like most industries, there's obviously a lot of talk about AI, artificial intelligence, in government services and the payment space. How can AI and automation be leveraged to improve both payer interactions and internal processes? And is there any sort of emerging AI driven solutions that stand out in the space that you've seen?

Morgan Jines: Yes. And AI, I'm starting to believe, is no longer a buzzword. It is it is here and here to stay.

We have we have gotten past that. And it's really interesting because I am definitely a data analytics nerd.

I love the numbers, and I think that I've seen, as fraudulent actors get smarter, that we have to, not should, we have to leverage AI. Some examples are card testing and being able to create someone's false identity and use their card. And so, one way immediately that I think AI can help with payments is having a mechanism in which you detect that and automatically decline a transaction.

And so, this is something that is already very prevalent in payments and a lot of the big players, you know, such as Tyler is involved in in identifying these fraudulent transactions before they occur and then automatically declining them. And so, again, thinking to how does this help internally with the different reporting and auditing requirements, you automatically minimize chargebacks. So, if you are preventing fraud before it even gets to, authorization and settlement, then it's not going to negatively impact your reporting and financial reconciliation.

And then you're not having to manage chargebacks. You're not having to manage the payer interactions and the frustrations that they have, by having to work through the chargeback. So that's one example, that's more, like, reactive.

Reactive to something that was a consequence of a fraud fraudulent actor. But I think another good example, which is more positive than a bad actor, is thinking of just trends and data analytics. And so, being able to forecast and predict different revenue models based upon when what type what time of the month do people typically pay? What are the seasonality’s in some of their payment trends?

And that helps predict, you know, when you need would need certain resources, to be able to work through some of that backlog, helps with predicting capital projects within a government as well. So, you know, if they, if there's certain time of year that revenue collection and money is flowing, more prevalent than others, then that would be a time that you would know for budget season to allocate certain funds for this quarter or this month. And so, I think a lot about, you know, predicting revenue and the cash flows specific to capital projects and ventures, with government. And this, you know, might be more applicable at the state level when they're looking at all of the, different localities that would be taking on certain tasks and and budget things a little bit more important.

But it still applies at the local level, but just probably at a lesser state.

Josh Henderson: Really important and interesting insights there as well. And now we like to wrap up conversations with kind of looking ahead into the future, and we've talked a lot about how rapidly the payments space is evolving in terms of the technology involved.

But I’m curious to get your take on what you see the future looking like for government payment systems and sort of how do you envision the role of technology evolving, say, in the next five to ten years in the space?

Morgan Jines: And so, payments, this I think this question requires focusing a little bit on pay the evolution of payments and the life cycle of a payment transaction because this, even in and of itself the last five to ten years, has changed dramatically. And there's so many players in the chain of a payment transaction, and it can be very confusing. You know, there's sponsoring banks, and then there's a payment gateway, and there's a payment processor. And so, I think, you know, kind of one reason to have a unified payment provider is it does eliminate a lot of the challenges of how complex payments can be. And so, technology has really enabled, the payments to become less confusing whenever you're having this unified and end-to-end transaction management platform through one provider.

So, I expect that the technology will continue to be smarter, and more parts of this equation can be less confusing because we're able to facilitate payments in real time. Right? And so, I think about funding, and you think about eChecks and ACH. And, typically, funding for eChecks and ACH could be, three to five business days.

And then if there were non-sufficient funds, getting that back ultimately, you know, into your system of record could be up to two weeks. And so, you can imagine the impact that would have on, the financial reconciliation process. And so, I think when you start thinking about things of FedNow and real time payments, these types of challenges, which create those pains in the reporting process get minimized because payments are delivered in real time. They're posted in real time.

And so, I think we'll continue to see technologies as we've already seen that help to increase the time into, the payer's wallet and then ultimately into the bank account on both sides of the equation.

I think another one is disbursements. And this one is a little bit less touched on, but it is one I think that will arise in the next, you know, several years. And you think about paying for child support payments or for unclaimed property or even thinking into the court system and being able to put card on files for an inmate. And being able to do that as a way to provide payment is incredibly powerful, and I think we're really just scratching the surface of all that we can do with disbursements, which everyone, I think, naturally for payments thinks of the what we're all used to, right, is you know, paying for a certain bill, within local government. But I think the other side of the coin is equally important, and we'll start to hear more about that.

And there's less providers with that in the market is the reality of it. And so, you know, you're constantly seeing new start-ups for payments and but it it's that one side of the coin. So, another thing to sort of check off, not just of what's coming, but when you're partnering with a strategic future forward government partner, that is something to consider. What all are their options, and are they preparing for the future, you know, in the form of this work?

Josh Henderson: That's fantastic, Morgan. Thank you so much for joining me today on the podcast. Really, really loved this conversation. Really appreciated the conversation. And we'll have you back again soon. So, we can't wait to have you back.

Morgan Jines: Bye, likewise. Thank you, Josh.

Josh Henderson: I hope you enjoyed this conversation with Morgan Jines. If you'd like to learn more about technology in the payments space and other topics discussed throughout the episode, check out our show notes for more resources.

A modern digital infrastructure allows the public sector to adapt in the digital age. From operational agility to data management and analytics, as well as cost savings, security, compliance, and scalability, governments are poised to take advantage of innovative technology to create more efficiencies in their systems and better support and connect their communities.

Tyler creates solutions made exclusively for the public sector and has experts with government experience ready to support you on this journey. I hope you're excited about what the future holds and will reach out to us at podcast@tylertech.com to connect with a subject matter expert if you'd like to learn more. And whether it's a unified payment system or modernizing your digital infrastructure or something else entirely, we want to hear from you about what you'd enjoy hearing more of and how we can make the Tyler Tech Podcast even better.

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For Tyler Technologies, I'm Josh Henderson. Thanks for joining the Tyler Tech Podcast.