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Market Niche Focus: Who Helps Government Take Online Payments?

There are quite a few companies selling government the ability to get paid.

Amazon has become the perpetual pariah of government technology. Public-sector chief information officers, startup founders and investors alike all point the finger at the e-commerce giant again and again, blaming it for high expectations from the average citizen. If they can order dog booties online with one click and have it shipped to their house in two days, with what measure of rage might they react when they must physically appear at the Department of Motor Vehicles for a driver’s license?

A whole host of companies have sprung up to make government a bit more Amazon-like. Among them are a bevy of firms all seeking to make it easier to pay the government for all the various things citizens need to pay for: parking tickets, permits and licenses, utility bills, and so on.

There are, of course, some giant players already in the marketplace. These include companies like Visa, MasterCard and American Express, which all have government business segments. These firms, however, occupy a very specialized place in payment processing: acting as a clearinghouse to facilitate connections between banks acting on behalf of payers and payees.

For this list, we are narrowing in on more software-focused payment processors that have been working specifically with state and local government to enable digital payments.

The companies on this list — which is not necessarily comprehensive — tend to offer a variety of services to government. Some, like Heartland and Vantiv, process payments directly. Others focus on user interfaces, systems integration and back-end process automation and leave the actual handling of payments to third-party partners.

Many on the list, such as NIC, PayIt and US Merchant Systems, take the approach of offering services such as website setup to government for no up-front cash, instead opting to collect revenue by attaching convenience fees to customer transactions.

Everyone on the list takes card transactions, but a few provide some more specialized services — Creditron, for example, lets governments send images of checks in for processing instead of having to physically send checks to banks. Paymentus offers payment through text. Some on the list, like Heartland and Stripe, give users the ability to accept newer payment methods like Apple Pay.

Many on the list also put a premium on integration. Stripe is the engine that powers ProudCity’s new payment tool, while Accela builds its payment tool into its Civic Platform.

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.