The digital age is no longer an apparition somewhere in the distance – it is here, and in part accelerated by COVID-19.
While spheres of Government are known for their slow grind due to tepid red tape and bureaucracy, the COVID-19 pandemic has made allowance for swift action and implementation across the board. Local Government should react accordingly.
It is time for municipalities to utilise digital technology for their bill-paying solutions. This mode will not only significantly improve their services, avoid waste and save resources in the long term, it will also curb the spread of the Coronavirus if people do not have to leave home to stand in long queues to pay for services rendered.
Municipalities that still use outdated payment methods are losing revenue as residents are reluctant to travel to pay their monthly bills. The time has now come for the many municipalities throughout the country that have failed to move with the times to introduce alternative, modern digital bill-paying solutions if they are to avoid inconsistent utility bill and rates payments, growing debt books and increased cashflow problems.
Local authorities are buckling under financial pressure to maintain essential services as their monthly income stream from residents run dry.
In the month of June, it was reported that Gauteng municipalities lost around R5 billion in revenue because of the Coronavirus pandemic. The Gauteng Finance MEC, Nomantu Nkomo-Ralehoko, said that many residents had not paid their rates and taxes because of company shutdowns and the National Lockdown. While lost jobs and salary cuts were instrumental in the loss, some residents had not paid for fear of coming into contact with other members of the public during the pandemic.
In July, the Finance Minister, Tito Mboweni, highlighted the plight of municipalities in light of this severe financial loss of income. He announced that municipalities would receive additional cash to boost their coffers, in order to assist them to maintain acceptable levels of essential basic services.
As revenue collection continues to challenge local authorities, the limited and inflexible payment channels, combined with limited channels of communication, is resulting in residents who are becoming disengaged from their municipalities. This, in turn, is resulting in poor credit ratings and service delivery.
Counter cash payments are no longer viable in the face of COVID-19. Residents have to withdraw fairly large sums of money from ATMs, which is an arduous and time-consuming exercise, before joining a second queue to pay cash over the counter at the municipality.
The challenges raised above underline the need for municipalities to move into the 21st Century, and to offer residents an effective and alternative method of paying their bills. Digital online apps provide that solution.
South African municipalities need to streamline payment options. Using digital payment platforms via websites, mobile apps, WhatsApp and even USSD, are some examples of the modern cashless age. A digital payment option would help residents to communicate more easily with their municipalities and to pay their monthly bills without needing to leave their homes. Another popular online payment method is EFTs. Electronic Fund Transfers use major credit and debit cards, such as Visa and MasterCard, to transfer funds digitally.
Municipalities can make huge strides in creating digitally empowered communities by introducing cashless payment options. The majority of people, even those without affluence, own cell phones. By using a Mobile Wallet, residents will be able to pay their accounts from their telephones by downloading an app. Apart from cash payment bank apps, there are countless numbers of other apps available in South Africa for account payments.
Making digital payments is safer and far more convenient than walking around with large sums of money. Paying municipal accounts digitally ensures confidentiality. The process is quick and painless with authorised payments receiving immediate authentication.
Digital payments also reduce the cost and the risks involved with handling large cash amounts, as is the scenario at municipal offices at month-end. This payment system is a vital financial tool that is both convenient and safe. Moving to a digital payment system will enable residents to pay their municipal accounts 24/7.
Opting for a digital payment system also augurs well for municipalities as it offers boundless all-round benefits to their residents. It will enable the saving of costs by increasing efficiency and payment processing speed, security and transparency by increasing accountability and reducing theft and corruption.
A recent study found that 73% of the country’s consumers are able to make digital payments via their smartphones. Consumers want to pay their accounts using a quick and easy route. Going digital is that solution.
Municipalities that have been back-pedalling must accept that an app economy is here to stay and has and will continue to change the way in which we live, just like the impact of COVID-19 has on our way of life.
Pierre Bernard is the MD of Ntiyiso Digital Services, a subsidiary of the Ntiyiso Consulting Group, whose mission is to “empower institutions that enable Africa’s development”.