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How Government Agencies Can Overcome Security Challenges on the Road to Digital Payments

Mobile bank conceptual illustration. Internet online banking on phone. access to the money on bank card through app on smartphone with nfc technology. Digital Financial services and pay in web shop.

For a while, concerns about credit card fees and legacy processing infrastructure might have slowed government’s embrace of digital payment options.

For a while, concerns about credit card fees and legacy processing infrastructure might have slowed government’s embrace of digital payment options. But that landscape is changing fast. Increasing consumer demand for a more seamless online experience and capable tech stack are helping government agencies move toward digital payments.

“The shift toward digital payments has depended on tech maturity,” says Brittney Carlisle, vice president of payment operations for CSG Forte. “Smaller government organizations have been exploring their options, while those with a larger digital footprint are expanding the reach of digital payments to more departments or adding kiosks for touchless solutions.”

Zoom out a bit and we notice a larger global movement toward digital payments. By the end of 2023, the industry is predicted to grow by 40 percent.¹ Nearly 6.1 billion people worldwide will be leaning on this method in just two years.²

“Governments are contributing to this explosive growth,” Carlisle says.


“The move toward digital payments makes sense for government agencies,” says Sukanya Madhavan, vice president of product management and engineering at CSG Forte.

For one thing, Madhavan says, “Our way of life has changed. Constituents are looking for touchless experiences across all providers.”

The contactless part of the equation might have occupied the spotlight during the COVID-19 pandemic, but accepting digital payments is also about offering customer convenience.

“When you give constituents these options, a lot more are going to make payments on time,” Madhavan points out. Governments experience less frustration about late fees and waste fewer resources on resolving related constituent complaints.

Offering digital payments also gives governments more data so they can create a more seamless experience and gain a holistic view of all their transactions. Constituents can log in to one portal and see all the payments that might be coming due. They can also choose to opt in for automated text reminders about payment dates.

On the back end, digital payments allow governments to devote fewer human resources to processing.

While digital payments might promise a seamless constituent experience and a path to modernization, there is one obstacle government agencies need to overcome: security.


While consumers are demanding touchless digital payment solutions, they are also being targeted by fraudsters.
60% of survey respondents in a Mastercard survey said they would think twice about doing business with a merchant who did not offer any electronic payment options

2020 saw a staggering 49 percent increase in cyber crime, according to the survey.³ As a result, governments are facing the same challenge as the private sector: how to increase digital payment options while keeping transactions and constituent data secure.

Tight budgets and limited resources exacerbate security challenges and the increased risk of malware and ransomware for government agencies. “Many organizations don’t have an extensive IT network they can leverage,” Carlisle points out.

Despite these challenges, government agencies must find a solution. They need to pay attention to security in order to:

  • Ensure adherence to compliance measures. Payment Card Industry (PCI) and National Automated Clearing House Association (NACHA) standards dictate how organizations need to collect, store and work with sensitive constituent information. Any digital payment solution will have to check off these boxes.
  • Uphold the public’s trust. Constituent confidence is directly related to how safe they feel conducting digital payment transactions. Paying attention to security will fortify defenses and develop and retain constituents’ confidence.
Government agencies need to keep these stringent security must-haves in mind as they look for a digital payment solution.


“Government agencies are looking for partners to add [digital payment] functionality that does not require a huge investment on their part,” Carlisle says. A checklist of factors that an ideal digital payment solution should cover include:

  • Have a security-first mindset. The solution should be PCI- and NACHA-compliant and allow tokenization and end-to-end encryption of constituent transaction data, Madhavan says. “Customers should need multifactor authentication to further strengthen security and reduce fraud and friction.”
  • Be easy to use both on the front and back end. “Agencies want a seamless end-to-end experience for their constituents and a simple solution their employees can use for reconciling the books,” Madhavan says.
  • Enable seamless integration into existing tech stack. “Multiple departments have specific software needs and they require a payment processor that can easily integrate with any integrated software vendor (ISV) solutions they may leverage,” Carlisle says. “A plug-and-play feature is essential because government organizations support multiple departments and constituents so a digital payment solution has to be implemented quickly so end users, whether that’s staff or constituents, can adopt it easily.”
  • Ability to include more kinds of digital payment solutions. “Ask if your solution is ready to go where the payment industry is going, whether that’s Google Wallet or Apple Pay. Millennials especially are looking for alternate and convenient payment options,” Madhavan says. At the same time, the solution needs to make room for all demographics and make sure constituents who prefer more traditional methods can still be accommodated.
  • Be customized according to an organization’s needs. “If they want more advanced web integration options, the solution needs to support that. If the organization does not have technical resources, a plug-and-play solution should be available,” says Carlisle. The ability to scale depending on digital maturity is key.


In the years ahead, expect more blurred lines between government and private industry when it comes to digital payments. “With more inquiries about digital wallet options and even cryptocurrency, the new wave of digital payments solutions is going to have to make room for the way constituents want to make payments,” Carlisle says.

“Constituents want the Amazon experience everywhere,” she adds. And government digital payment solutions are working to deliver that same experience.



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