the future of digital payments: adapting to shifts in

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The Future of Digital Payments: Adapting to Shifts in Constituents’ Expectations and Preferences

Prepared for MFOA

September 21, 2021


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Forward Looking Statements

Disclaimers


Emma joined the Acceptance Sales and Solutions team at Visa Canada, in Toronto, managing

technology partners and key emerging segments.

Prior to Visa, Emma has spent more than 20 years in the payments field including Chase

Paymentech, Visa Europe, and a Canadian ISO, in a variety of roles spanning Relationship

Management, Risk Management and Operations teams


• In collaboration with MFOA, Visa commissioned an online survey in August 2021 in Ontario,

with the objective of helping us:

• Understanding municipal payments and disbursements across Ontario, in both large and

small municipalities

• Understand constituents’ existing behaviour, preferences and expectations in their digital

interactions with their municipalities

• Hearing compelling voices of municipal residents to provide depth and understanding to

the quantitative findings

• We would like to acknowledge the contributions made by:

• Krista Klesch and Suzanna Dieleman of MFOA for their guidance and feedback on survey

design

• Chestnut Research for conducting the survey

Background: Survey of Municipal Payment & Disbursement in Ontario


Survey represents all Ontarians including those in small, medium and large municipalities

An even 50/50 split among men & women

67% Larger Municipalities – 100,000+

12% Small Municipalities – 9,999 or less

21%Medium Municipalities – 10,000 - 99,999

66% are employed and 25% are retired

20% are affluent with household income of over $100,000

14% have a secondary residence

58% of the secondary residences are in small municipalities

All made payments to their primary municipality in the past 12 months

S1. Please indicate your age.

S2. What is your gender?

S3. Q28. Which of the following best describes your annual household income before taxes?

Q27. Which of the following best describes your current occupation?

Q5. Do you have a secondary residence?

Q7. When was the last time you made a payment to the municipality of [INSERT PRIMARY MUNICIPALITY]?

A 15-minute online survey

among 1,518 Canadians

conducted August 9 to

August 25, 2021. 23% aged 18 to 34, 37% aged 35 to 54 & 40% aged 55+


First, lets look at Ontarians’ municipal payment experience


Payments with regular due dates or scheduled payments were the most common types of payments made to municipalities

12%

13%

69%

71%

Less regular payments (i.e., library fees,

disposal fees, snow removal fees, etc.)

Ad-hoc payments (i.e., building permits,

recreational activities, burn permits,

ambulance fees, etc.)

Regular/scheduled monthly or bi-monthly

payments (i.e., electric utility fees, hydro fees,

etc.)

Regular due dates (i.e., property taxes)

Types Of Municipal Payments Made In The Past

Year

n=1518

Ad-hoc/Less Regular Payments Total

Airport fees 8%

Ambulance fees 6%

Animal control and by-law

enforcement fees 7%

Arts & Culture 5%

Building permits 7%

Burn permits 4%

Cemetery fees 3%

Community centre rentals 3%

Disposal fees 10%

Dog tags 9%

Fire services fees 4%

Ice rentals (arenas) 1%

Library fees 6%

Marriage licences 2%

Parking fees 16%

Planning fees 2%

Public transit fees 10%

Recreational activities 6%

Snow removal fees 4%

Storm water fees 8%

Wedding officiant services 1%

Regular/Scheduled Payments Total

Child Care fees 5%

Electric utility fees 31%

Property taxes 64%

Natural gas utility fees 22%

Sewer fees 18%

Water fees 41%

1

2

31

2

2

Q11. What services, offered by your primary municipality, have you made payments to in the past 12 months?


Most Ontarians pay their regular/scheduled municipal services online and would prefer to pay via pre-authorized payments/direct deposit or credit card

n=1518 n=1518

Q12. How did you pay your municipality for each of the services used in the past 12 months?

Q13.. What is your preferred method of payment for each type of municipal fee?

71%

13%

4% 3% 2%

48%

4%7%

27%

12%

Online At Financial

Institution

Telephone banking In person By mail

How Ontarians Are Currently Making Payments Today

Regular/Scheduled Services Ad Hoc/Less Regular Services

38%

24%

15%

12%

4%3%

12%

38%

7%

13%

11%

18%

Pre-Authorized Credit Card e-Transfer Debit Cheque Cash

How Ontarians Want To Make Payments

Regular/Scheduled Services Ad Hoc/Less Regular Services


Almost one-third of participants are willing to pay a fee to use a credit card to pay for utilities, property taxes, etc.

28%

63%

9%

Willingness To Pay A Fee For Using a Credit

Card to Pay For Utilities, Property Taxes, etc.

Yes No Unsure

Q13A. Would you be willing to pay a fee for using a credit card to pay for utilities, property taxes, etc.

78%

16%

6%

Type Of Fee Willing To Pay To Use A Credit

Card For Utilities, Property Taxes, etc.

Fixed fee Percentage of the total fee Other

n=426

44%

40%

16%

Interest In Paying Utility Or Electric Fees

Via Credit Card With Installment Options

Through Credit Card Issuer

Yes No Unsure

n=1518n=1518

Q17A. Would you have an interest in paying your utilities or electric fees via your credit card, with an option for

using instalments through your credit card issuer?


92%

82%

75% 75% 75% 75% 74% 73% 71% 71% 71% 71%68% 67% 67% 66% 65% 63% 61%

54%

Experience Pay For Ad-Hoc/Less Regular Services

Top 2 Box Scores

82%

69% 69% 68% 67%65%

Child Care fees Electric utility

fees

Property taxes Sewer fees Water fees Natural gas

utility fees

Experience Paying For Regular/Scheduled Services

Top 2 Box Scores

The experience of paying for municipal services is overall positive with approximately two-thirds rating it excellent or very good

n=1518 n=1518

Q14_What was the experience of paying your municipality for these services like?


Ease and flexibility are the primary drivers of a positive payment experience

94%88%

81%

57%

Easy to make the payment Easy to set up Flexible payment methods

(i.e., cheques, credit)

Can pick up the phone

% Agreeing Elements Are Important When Paying Municipalities

n=1518

Q17. Thinking about the experience of paying your municipality, how important are the following elements.


Now, lets turn to their municipal disbursement experience


About a quarter of participants received a payout, refund or funds from their municipality in the past 12 months

11% 10%5% 2% 4%

69%

Past 3

months

Past 6

months

Past 12

months

Past 1-2

years

More

than 2

years ago

I never

did

Received A Refund From

Municipality

26%

n=1518

28%

60%

7% 5%

Less than $100 $100 to $500 Over $500 Unsure

Refund Amount Received

From Municipality

n=385

88%

Q18. When was the last time you received a payout, refund or funds from your municipality (excluding income taxes)?

Q19. How much was the payout, refund or funds from your municipality?

45%

36%

26%

20%18%

4%2%

Credit

Card

Cash Cheque Debit Card Direct

Deposit

(electronic

banking)

e-transfer Other

How Refund Received

n=385

Q20. How did you receive the payout, refund or funds from your municipality?


71%

61%59% 59% 57%

53%

Child Care fees Electric utility

fees

Property taxes Sewer fees Water fees Natural gas

utility fees

Experience Of Receiving a Refund For

Regular/Scheduled Services

Top 2 Box Scores

90%87% 84%

80% 79% 78% 77% 77% 77% 74% 73%70% 69%

64%59% 59% 58% 57%

52% 51%

Experience Receiving A Refund For

Ad-Hoc/Less Regular Services

Top 2 Box Scores

The experience of receiving a refund was OK, clearly showing some room for improvement

Q21. What was the experience of receiving a refund from your municipality for various types of payments like?

n=385 n=385


Receiving a refund from a municipality is about simplicity

n=1518

86%

80% 78%

61%

It is easy to find out

about rebates

Ability to receive a

refund directly from the

municipality and not just

a credit

Bill was lower than

expected and a credit

was applied to my

account

Can pick up the phone

Key Elements Of Receiving A Refund

Top 2 Box Scores

57%

27%

19%

14%

9%

2%

Direct Deposit Cheque Credit Card Cash Debit Don’t

Know/Not

Applicable

How Prefer To Receive Refund

n=1518

Q24. Thinking about the experience of receiving a payout, refund or funds directly from your municipality,

how important are each of the elements?


Ontario residents have high expectations of the payment and disbursement experience

Q26. When it comes to making a decision about municipal payments and disbursements, how important are the following elements?

96%95%

94% 94% 93% 92%91% 91% 91%

89%

81%

Adequate

communication if

there is an issue

with my payment

Confident your

payment will be

received by the

municipality

It is easy to receive

a refund

Confidence in the

payment methods

It is easy to make

the payment

Payment methods

are offered by a

trusted firm (i.e.,

Visa)+A151:Q161

The process is fast Client services

representative is

available if I have a

problem

Ability to choose

how I want to make

the payment (i.e.,

credit card, cash,

cheque)

The payment

platform is easily

accessible via web

or mobile

phone/tablet

Available 24/7

Overall Desired Payments & Disbursement Experience

Top 2 Box Scores


And finally, some insights from Ontarians who use a third party to pay taxes in other ways…


Vice President, Cards and PaymentPayment Source.

Speaker Bio: Albert Lang

Albert Lang is ‘Vice President, Cards and Payments’ at Payment Source. He has

played a lead role in delivering payment innovations such as ‘Loadhub’ (a

national retail network enabling cash acceptance at over 6,000 post offices

coast to coast); ‘PaySimply’ (a tax and bill pay service enabling alternative

methods of payment to CRA and thousands of other billers); and ‘Canada Post

Prepaid Visa’ (Canada’s first national prepaid Visa reloadable card program).


(What we do)

Enabling more methods of payment

…and other

government

bodies


The payer experience

1. See preferred payment option on

municipality website and click.

2. Enter payer details. 3. Choose your way to pay.


Feedback: Why did you choose your payment option?

(What our users tell us)

Anecdotal Insights

How was your experience?

“I prefer paying by credit card”

“It is fast, and easy to keep track of

my payment!”

“Use credit to get air miles”

“Immediate and simple”

“Recommended by tax assessor”

“Ease and security”

“Convenience, travel points..”

"Ease of use low rates"

"To deal with it ASAP"

"Sooo easy and convenient"

"Great service! Will use again."

"Quick, easy and secure method to

pay my property taxes without

leaving my home!"

"Great experience, enjoyed paying

on line. Saves a lot of time."

"Very easy to do but the charge to

do it was a little high in my opinion"

"So much easier this way & quicker.

"First time user - very simple and

convenient process!"

Thank You!

the future of digital payments: adapting to shifts in

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