PagoPA: where we are now and what the next steps will be
The growth of the Public Administration’s centralized payment platform plus a few good examples
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In May we wrote about our plans for transforming the Public Administration’s digital payment system (if you missed the post, you can read it here). We also outlined what we thought were going to be the next steps in our journey. We started with PagoPA, the centralized node for Italian public payments, which we have been taking care of in the last year. Together with AgID, we have improved the platform and helped its growth by increasing the number of services available on behalf of the Public Administration, and the positive trend is clearly reflected by the numbers. Currently, there are several virtuous examples where PagoPA works well, such as what’s been experienced by the Municipality of Milan.
So here we are. We’ve decided to share with you the latest results of the project and update you on the things we still have left to do.
We started with four goals
After the first months spent studying the platform with the goal of improving (rather than throwing away) the work done in previous years, we gave ourselves four main objectives:
1. improve citizens’ online user experience from a mobile first perspective;
2. improve citizens’ offline user experience (i.e., paper-based notifications);
3. increase the quality and number of services displayed on the PagoPA node by central and local public administrations;
4. change the architecture of the node from a pure hub that redirects transactions to the banking world to a real payment gateway that can open itself to the world of innovative and non-traditional solutions (such as PayPal, Satispay and MasterPass).
Of course, everything must be done in compliance with European payment regulations (PSD and PSD2). Many things have been accomplished so far. Let’s go through them together, point by point.
1. Improve citizens’ online user experience from a mobile first perspective
The needs of every citizen are clear: to be able to pay taxes, university fees and school meals, fines and TARI (the municipal waste tax), plus many other services provided by the Public Administration, with a credit and debit card – just like on any e-commerce site – and to be able to save one’s payment preferences so that payments can be made quickly, with a single click.
To make this possible, as was already anticipated in May, we intervened on the front end architecture of the platform and have been releasing the libraries for mobile apps (SDKs – Software Development Kits) on Developers Italia, including the relevant documentation, resources and examples to facilitate the integration and use of apps belonging to the various Public Administrations.
By the first half of December, we will be releasing the new web experience, the related APIs (Application Programming Interfaces) and documentation. By the end of December, the new PagoPA will be available to all Public Administrations that want to offer the latest web and mobile services.
2. Improve citizens’ offline user experience (i.e., paper-based notifications)
Not every citizen can or wants to pay online. Therefore, we need to make offline payment experiences accessible and easy to use for all citizens who prefer to pay either at the post office or at an authorized point of sale. Communication from the Public Administration needs to be simple in order to be effective.
Citizens need to be at the center of all our strategic choices, they must be free to pay how and where they want.
It’s in this spirit that the new PagoPA paper notification was born, and used, for example, to effectuate the TARI waste tax of the Municipality of Milan. It’s a simple and straightforward form that clearly indicates to citizens all the possible payment methods: through the municipal website, at the bank or post office, as well as at the tobacconist and betting outlets (it sounds strange but these are now common places that accept payments of different kinds, including those of the Public Administration).
The consolidated results of the TARI for the Municipality of Milan were significant: over 532 thousand transactions with a total of over 182 million euros received.
Compared with 2016, revenue increased by 46% in the first month, with an overall increase of 20%, which corresponds to about 30 million euros. Many payments were concentrated over the weekend or late at night, made through channels that were not available last year. In short, citizens paid faster and more easily than what they were able to do a year ago.
Based on the very notification template used for TARI, we have, together with the Italian Postal Service, been redesigning the postal payment slip to make it clearer and more legible. We’ve given ourselves until next spring to propose the new template (the Milan model) to all Public Administrations. In addition to all the payment options, the payment slip template also contains a new graphic design.
In essence, we have integrated within PagoPA the possibility for all the Public Administrations to use this same paper notification in a digital format. Why? We want to finally give all Payment Service Providers the opportunity to send it to citizens via text message or simple push notification on their mobile phone, using the same channels we are already using every day.
3. Increase the quality and number of services available on the PagoPA node, for both central and local administrations
By doing a detailed analysis of the TARI payment data for the Municipality of Milan, we realized that citizens used a multitude of different channels to make their payments. Among these channels were new market players like PayTipper, Satispay and PayPal. In addition, the best news is that the number of negative reports received by the Municipality was truly minimal.
The availability of several channels and many portals, together with time flexibility and the presence of assistance have been the winning variables in this first phase, a phase that will see PagoPA take on all Public Administration payments.
The numbers show that if citizens can choose how to make a payment, they will always do it according to their own personal preferences and habits.
To date, about 35% of Italian municipalities are active on PagoPA.
By comparing active entities with their population distributions, we can see that entities with over 15,000 inhabitants (and larger) are the ones adhering most quickly to the transfer. The Public Administration’s average transactions went from 81 to 329, and the trend is positive. The process has been triggered: even ACI (Italy’s Automobile Club) is a protagonist, having transferred all its automatically paid online bills to PagoPA. This will permit the elimination – starting on January 1, 2018 – of the 1,87 Euro transaction fee for online payments.
4. Change the node architecture from that of a pure hub that redirects transactions to the banking world to a real payment system
This change in architecture has led PagoPA to also being able to manage all payments made with cards (credit cards, debit and prepaid cards) by presenting itself with a new user experience.
Citizens can enter their card details without worrying about having to choose a PSP – Payment Service Provider – to execute the transaction: this will be chosen on the basis of an “on-us” logic. That is, whoever issued the card manages the transaction. This allows for more advantageous choices for citizens who, in any case, will always have the freedom to change PSP.
But that’s not all. The change in architecture has also introduced the concept of wallet, that is, the possibility for storing a preferred method of payment for use in successive transactions by simply selecting it.
And then there are the other payment tools. PagoPA is becoming inclusive, a platform where major entities like PayPal and Satispay (both already on board, since July and November, respectively), as well as Masterpass and Jiffy (the equivalent of peer to peer for banks, already on the way to integration), have found or will find their place.
Our objective is to use all the channels that citizens are already using in their daily lives, allowing their experience of making payments on PagoPA to become ever more enjoyable and accessible.
Of course, none of this would be possible if we hadn’t acted according to the logic of systems thinking, involving not only all Payment Service Providers but also institutions, like the Bank of Italy. We’ve triggered a virtuous circle that will move citizens towards a new and better relationship with the online payments to the Public Administration. Soon we will be saying to each other, “Hey, do you even remember what the queues for paying bills at a transaction window were like?”