The urban population in Africa has swelled from 15% of the total population in 1960, to over 40% in 2010 and is set to exceed 60% by 2050[ii]. It is anticipated that South Africa will follow suit. In fact, current projections indicate that an additional 19 to 24 million people will be added to the national population over the next three decades, and that the vast majority of this growth will be confined to cities and towns[iii]. But what is needed by the country’s municipalities to cope with and cater for this growth?
“Municipal payments play a vital role in creating cities of the future,” says Nomvula Nyandeni, Business Development Lead at Pay@, one of Southern Africa’s leading payment solutions providers.
“Municipal revenue collected from customers is integral to sustain cities financially and, most importantly, to ensure that service delivery takes place. This will leave a lasting legacy for generations to come,” explains Peet du Plessis, Head of the Revenue Management Unit at the eThekwini Municipality.
Tsaone Ocilia Sekgala, Deputy Director: Budget & Treasury at the City of Matlosana, adds that this enables the municipality to render quality and sustainable services. “The revenue collected is invested in community infrastructure such as stadiums, sanitation, roads, and community halls; as well as in the maintenance of existing infrastructure to avoid dilapidation. This ensures a well-serviced town which in turn will attract Investors. It also goes towards local economic development and growth.”
Nyandeni notes that there are certain municipalities which are in debt due to non-payment by citizens. “This can be attributed to a number of reasons including affordability, lack of service delivery, citizens’ lack of knowledge of outstanding balances, and municipalities billing customers incorrectly. Consequently, service providers like Eskom have been forced to shut off power to these municipalities, highlighting just how crucial these payments are for our cities.”
On the issue of incorrect billing, she shares that having proper billing systems in place is essential if we are to take our cities into the future. “These systems need to eliminate unallocated payments and generate daily reports to reconcile customer balances.”
Nyandeni believes that, when it comes to collecting revenues, municipalities also need to make it easier for citizens to make payments as this might be yet another cause of non-payment. “Municipal offices are typically only open during the week and for a limited time at that, meaning that customers have to take off work and travel to these offices if they want to make a cash payment. More payment options are crucial, especially for those who are unbanked – which is about 23.5% of the population[iv]. Municipalities have to meet people where they are and we have seen significant value in giving them the option to pay in-person at their nearest retailer or by using digital channels such as mobile apps like Masterpass and MTN MoMo for example. Providing citizens with the most optimal bill presentment medium is also important for collection effectiveness. For instance, this could be by posting hardcopies, emailing invoices with barcodes and QR codes, displaying bills on a municipality’s website and other digital channels, or by sending payment requests through mediums such as SMS and USSD.”
She concludes by saying: “With our cities getting bigger and bigger, it is vital that municipalities get their payments right sooner rather than later. This is all the more pressing given that several smart cities are being planned for South Africa, including the Lanseria Smart City and Mooikloof Mega-City developments in Gauteng, as well as the Durban Aerotropolis in KwaZulu-Natal. These cities aim to be safer, greener, healthier and more connected and that might impact what people pay their municipalities for in the future, as well as how they pay.”
About Pay@
Established in 2007, Pay@ is one of Southern Africa’s leading payment solutions providers and is trusted by prominent South African organisations to optimise their billing and payment processes. Pay@ is in the business of providing payments experiences, offering a capability that allows a client to accept payment from their customers through relevant, simple, secure and reliable payment journeys. The company offers consumers a growing variety of secure, innovative and convenient bill presentment and payment platforms. Its robust system ensures highly efficient processing, with unallocated payments being eliminated and proven transaction success rates of more than 99.996%.
[iv] https://oxfordbusinessgroup.com/analysis/final-20-reaching-unbanked-population-complex-task