Why digital payments are important in a smart city?

Why digital payments are important in a smart city?

The famed British Zoologist Desmond Morris once said something which beautifully sums up the story of current cities across the world. He said, “The city is not a concrete jungle, it is a human zoo�. Today, almost 55% of the world population lives in urban cities and this proportion is all set to go as high as 68% by the year 2050.

 What is a smart city?

According to Wikipedia “A smart city is According to Wikipedia “A smart city is an anurban urbanarea areathat thatuses usesdifferent differenttypes types ofofelectronic electronicinternet internetofofthings(IoT) things(IoT) sensors sensorstotocollect collectdata dataand andthen thenuse use insights insightsgained gainedfrom fromthat thatdata datatoto manage manageassets, assets,resources resourcesand andservices services efficiently, efficiently,ininreturn returnusing usingthat thatdata datatoto better improve the operations across better improve the operations across the thecity. city.

This includes data collected from citizens, This includes data collected from devices, buildings and assets thatcitizens, is devices, buildings and assets that is processed and analyzed to monitor and processed to monitor and manage trafficand andanalyzed transportation systems, manage traffic and transportation systems, power plants, utilities, water supply power plants, utilities, water crime supply networks, waste management, networks, waste management, crime detection, information systems, schools, detection, information systems, schools, libraries, hospitals, and other community libraries, hospitals, and other community services. services.

In a nutshell, it’s an attempt to In a nutshell, it’s an attempt to leverage cutting-edge technologies leverage cutting-edge and tools like AI, IoT,technologies digital and tools like AI, IoT, payments, informationdigital & payments, information & communication technology (ICT), communication technology (ICT), etc. to optimize the city functions etc. to to drive optimize the citygrowth. functions and economic and to drive economic growth.

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ďƒ˜ What is the role of payments in a smart city?

Payments are a significant component of smart cities since it features in the majority of basic services offered to the citizens. All these services form the core of the economic activity which includes business procurement, salaries, consumer spending, and tax collection.

Nowadays, more and more cities are realizing the significance of smart payment technology which plays a crucial role in achieving the vision of a smart city.

Digital payments can play a major role in improving the payments ecosystem across departments with various use cases that can cover multiple C2G (Citizen to Government payments) like electricity, toll & transit, taxi, water, education, tourists places, social services, healthcare, CFC centres, penalties, and public convenience.

Similarly, it can also cover multiple G2C (Government to Citizen) payments like monetary awards, senior citizens benefit, subsidies, and scholarships. These use cases ensure enhanced efficiency and security by reducing the dependency on cash.

 Challenges associated with digital payments in smart cities External challenges  Low internet connectivity, penetration, and poor infrastructure is adversely affecting the customer experience for online tra nsactions  Due to inadequate training of . operational staff to manage seamless delivery of payment services and handling customers with special needs have resulted in customers having low trust in digital or technology-based payments.

Internal challenges  The current infrastructure in the government bodies of many developing nations for collections and payments is mainly focused on cheque and cash thus making it inadequately equipped for accepting digital payments.  Digitizing existing data records is a challenge in itself which is made tougher via siloed businesses and with the limited information sharing across channels, divisions, and departments.  The absence of a unified strategic vision is causing the payments digitization effort to be less effective.

 Digital payment use cases in smart cities

 Many corporations around the world are now looking to establish a sustainable cashless ecosystem.

However, we already discussed there are few major challenges that can prove to be a major roadblock.

Loremasipsum  These roadblocks can be eliminated by boosting the adoption of digital payments. Below are a few examples in the form of the use cases as to how you can overcome these roadblocks.

 One city – one card

 Direct benefits transfer based on Aadhaar

 Citizen facilitation centre  Many corporations around the world are now taking firm steps towards digitizing their ward offices. Not only this, web-based payments, mobile apps, and POS terminals have been deployed by these corporations to make tax collection cashless.

 Few municipal corporations in India have begun to transfer various benefits to their citizens, school children, and corporation staff on the basis of their Aadhaar (which is an identification and authentication number in India) loaded on a prepaid card.

 Doorstep solutions  Few of the corporations have started doorstep services for tax collection, where an officer digitally collects the tax at the citizen’s doorsteps at the time and date selected by the citizens themselves.

 One city – one card system is based on the idea in which the citizens can use a prepaid card to make payments across multiple services like government-owned activities, municipal taxes, transport, and many more.

 What are the emerging digital payment solutions for smart cities?

 The above mentioned are not the only use-cases of digital payments in smart cities. Digital payments have a massive potential that smart cities can leverage from. In fact, there are many emerging digital payment solution and initiatives for smart cities. Let’s have a look at few of those:

 Unified payments instrument

 A digital payment mode which is common for making payments at all public transport like local trains, metros, and buses.

 Health card which enables citizens to access free medical benefits without facing any hassles.

 A common instrument that can be leveraged to transfer benefits to women, school children, others for welfare schemes.

THAN K YOU