City staff are recommending that Toronto City Council approve a new deal negotiated with a digital payment company to simplify and modernize payment across all city services.
A staff report approved by the city’s executive committee today says the contract would save the city about $11 million over five years by streamlining payment processes across all services, such as property taxes, court fees, permits, utilities and other services.
Currently there are multiple payment systems in place for various city services.
According to the report, the contract with PayIt Digital Government Inc. would simplify the experience for customers by creating a single platform for payment across all city services.
The new platform would launch this summer and would initially be used for property tax, utility bill, and parking violation payments.
Customers who currently pay through their banks would continue to be able to do so, but would also be able to pay on the new platform using a credit or debit card. The company would charge customers for credit (2.35 per cent) and debit (1.5 per cent) payments, while EFT bank transfers would continue to be free.
The city currently covers transaction fees for card payments on some city services, but has said that doing so is unsustainable.
PayIt, a Missouri-based startup, has been providing digital payment software for major fundraising campaigns and state contracts in the U.S. for several years.
The company opened a Canadian head office in Toronto in September, in the Harbord Village area. The launch of the Canadian subsidiary marks its first foray into the international market.
"We are absolutely thrilled to be opening our Canadian headquarters here in Toronto. This city is already home to some immense tech talent and we are excited to contribute to this ever-growing pool of talent," PayIt CEO and founder John Thomson said in a news release at the time. "It is our plan to use our presence in Toronto as a means to create more highly-skilled tech jobs in the city and to support the continued development of Toronto's tech talent footprint."
If the company gets the go-ahead to roll out the platform for Toronto, other services such as building permits, licenses, and court fines would eventually be integrated onto the same platform in subsequent phases.
“The platform will not only provide residents with greater digital payment options, it will offer self-service features that people expect from modern mobile and web applications in a digital era,” the staff report says. “From personalized bill reminders to scheduling payments, to storing account documents and saving preferred payment methods through one digital wallet, the platform will make the experience of accessing city services and paying bills much simpler.”
According to city staff, the platform would save the city about $11 million over five years through a reduction in office visits, mail outs, credit card service fees to the current payment provider and other streamlining.
The report says the deal would shift certain technology building risks away from the city by adopting a cloud-based software-as-a-service model, but notes that the company would still have to comply with Canadian data requirements and the city's privacy and security standards.
PayIt would be compensated an estimated 0.49 per cent of all the revenue collected through the new platform. The contract is estimated to be worth somewhere between $20.5 to $25.1 million over five years.
The initial deal with the company would run for a three-year term, with two possible one-year extensions.
The company first approached the city last year and was selected through a request for proposals process. City staff started negotiating with the company in February and wrapped up earlier this month.
The staff recommendation to go ahead with the deal will go before Toronto City Council next week.
