“More with less” is one of the promises of smart city technology -- and nowhere is this more true than in payments and finance. By leveraging the techniques explained in this chapter, city governments can spend less while offering citizens more benefits, more convenience and more inclusion.
Today cities are the hub of world economic growth, generating an estimated 80% of global GDP, according to the World Bank. Yet many cities are severely challenged by rising (or slowing) population growth, by aging or inadequate infrastructure, by increasing operational costs and by “do more with less” austerity pressures.
So how can they compete effectively? How can they pay for the smart infrastructure improvements that attract and keep new businesses, skilled workers, tourists and other accoutrements of a robust economy?
They can start at city hall.
Cities bring in revenue – from the money drivers put in parking meters to the sales tax shoppers pay to the fees developers shell out for building permits. Money flows the other way too, of course, from salaries paid to city employees to goods and services procured from vendors.
In fact, cities make huge volumes of payments to suppliers, to employees and to citizens receiving benefits. They also collect big amounts in taxes, fines and use payments. This makes payment systems an important target for modernization.
Payments touch every aspect of our lives.
Removing cash from the economy creates far-reaching and cumulative benefits for all participants — citizens, merchants, tourists and government — improving life for the city at-large. That’s because cash causes problems while increasing costs. By digitalizing both disbursements and collections, a city generates significant savings and increases operational efficiency.