Better way to pay for public services

28 October 2012


Jim D pic










With its Public Sector Reform plan, the government is opening the door to technology companies who can offer improved customer services that maximise new delivery channels The need to radically reduce costs is well documented, and a mandate to become more efficient and add value is starting to encourage a more open approach to finding solutions.

All of this is good news for Payzone, which has already achieved considerable success at home and abroad. In Britain the public sector accounts for around 50 per cent of its business.

The firm has built a consumer payment network across Europe that uses a combination of retail outlets, the web and mobile to facilitate transactions. Payzone claims its three-way services can halve the cost of collecting payments for local authorities and government bodies.

“We save them money and offer a better service, anytime, anywhere,” said Jim Deignan, managing director of Payzone. “There are physical points of sale open seven days a week many available on a 24 hour basis and a parallel online service.”

The company’s reputation has been built up over the past decade, initially in the mobile space where it was responsible for a pioneering system that let retailers generate top-ups from their existing point of sale tills. Another first came in the public sector with an electronic pay as you go solution for payment of domestic refuse and recycling payments.

One of its highest profile ventures has been the parking tag system which, allowing motorists to instantly park and pay by mobile phones in 35,000 bays across the Dublin City Council area.

Having registered their payment details with the website, car users simply send an SMS to cover the metre charge. Payzone will automatically remind users 10 minutes before their parking time expires and top ups can be made without having to return to the metre.

“We manage the transactions at the back end. It’s much more convenient for the consumer and for the local authority because it’s all done electronically,” said Deignan. “Councils don’t have to pay someone to collect the cash from the metre. There is an opportunity to build on it nationwide and we’re seeing increased interest in it”

Here, the National Transport Authority launched Payzone’s Leap Card, an integrated transport ticketing system for the Greater Dublin area. Users can buy and top up their travel cards at more than 350 authorised agents as well as on the Leap website.

“Solutions akin to the Leap Card, developed around international transport systems are, evolving rapidly, and Payzone is well placed to lead the development in the Irish market,” said Deignan.

“As we increasingly move to transfer the level of cash into electronic payment markets we see the significant benefit to be reaped by retailers and consumers alike. Today the firm runs the largest branded payment network in Ireland (and one of the biggest in Europe), covering 11,500 points of sales with over 2,000 outlets branded with Payzone and offering the full suite of payment services. Around a million transactions a week are carried out across its various channels.

“We’ve created a brand based on a network of retailers and a fleet of services that we run underneath it,” Deignan said. We have built a capability to manage large volume transactions.”

Payzone’s track record of proven delivery strikes a chord with government agencies, according to Deignan.  “One of the big issues with the public sector is risk. They know that their traditional methods work but are relatively inefficient and are starting to look at more efficient alternatives,” he said. “We have built up our credibility. They recognize that we are dependable and can replace more costly solutions. “

Another change that works to Payzone’s advantage is in the utility sector where the regulator wants smart metering technology to deliver more value around gas and electricity. “We’re working on prepaid services that will increase significantly over the next couple of years because the utility companies see it as a way of reducing exposure to bad debts” said Deignan.

The company has announced a top-up payment solution that will support a new generation of prepayment gas and electricity meters that are being rolled out to 100,000 households experiencing genuine financial hardship. Consumers will be able to buy a range of energy credits from Payzone outlets and enter the amount using the meter’s built-in keypad and a pin number.

Lurking in the wings is the government’s introduction of household charges, which Payzone is well positioned to deliver. With a tender still to be announced, Jim Deignan would only say that he had conversations with various government departments. “It would certainly be something we feel we could add value to” he said.

Ironically, in the internet age, the company’s unique selling point is bricks and mortar, the network of physical outlets from Topaz petrol stations to Dunnes Stores. But Deignan is under no illusion as to which way the market is going.

“We do see an increasing volume of consumers shopping online as new technology like smartphones make it easier. In the utility markets around 60 per cent of transactions now take place online,” he said. “We have the ‘clicks and bricks’ offering, payment engines or gateways, or mobile solutions.

“We give our clients a suite of solutions to ensure that their customers are serviced. We’re agnostic in terms of channel; we do retail, online and mobile. Ultimately it’s a transaction engine at the backend.” The bigger drive is about taking cash out of society, according to Deignan.

“If you can prepay or preload value on cards you no longer have the dependency on cash and the necessity to have the right coinage,” he said. “With something like Leap, there is the potential to have people getting on and off all public transport with a prepaid card. It’s not unusual internationally.”

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