RFP Best Practices to Find the Right Payments Partner

Creating an RFP is a complex process, and crafting an effective one is even more challenging. A well-structured RFP requires consideration of multiple factors and government decision-makers to ensure your organization receives high-quality proposals from prospective payments vendors. Utilizing RFP best practices ensures your organization selects the optimal solution for staff and residents, maximizes taxpayer dollars, improves scalability and innovation of payment technology, implements modernized payment channels, and adheres to ever-changing rules and regulations.

When drafting an RFP for a government payments solution, here are a few things to consider:

• Strategy and Structure
  • Gain organizational buy-in early. When drafting an RFP, it is essential to have sponsorship from your government’s technology authority, such as a CIO or IT director, as well as support from your treasury or finance department. This cross-functional collaboration ensures your future payment systems can break down silos and effectively scale across multiple departments, keeping each department or agency’s priorities at top of mind.
  • Beware of low-cost providers. A focus on features and value to the government enterprise is a crucial component of an RFP, but being a good steward of taxpayer funds is equally important. Focusing solely on finding the lowest price can bring savings but also limits the solutions' capabilities and may not provide the best experience for both residents and staff, such as payer options and self-service capabilities.
• Vendor Experience
  • Rest easy knowing your vendor has done this before. Including experience requirements ensures vendors understand regulations and compliances and have the ability to handle the volume of transactions your organization manages. Consider setting minimum requirements for government experience, volume experience, and point-of-sale (POS) terminal equipment experience. It is also pertinent to verify each provider complies with the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN).
• Scope of Services
  • Consider mission-critical tools and services. Providers should offer a comprehensive range of services that cover all aspects of the payments process to ensure governments have the necessary tools to effectively and efficiently do their jobs. Financial transparency in this area includes robust financial reconciliation support, detailed reconciliation tracking with line-item specifics, and a unified view of all transactions across various channels and methods. This enables data aggregation from multiple perspectives into a single view. Additionally, vendors should provide data visualization tools for improved reporting and deeper insights, along with a flow of funds model that illustrates both simple and complex transactions, convenience fees, and compliance with industry-approved programs.
  • And don’t forget those services that aren’t always top of mind. Other important services should include transparency tools for fees, such as detailed breakdowns of interchange fees and mechanisms to monitor for downgrades, improving cost of services regardless of fee model. Support for recurring transactions is also vital, including payment storage and payment portals tailored to residents that facilitate stored and recurring payments, improving their self-service capabilities.
• Payments Channels
  • Meet payers where they are. Today's residents seek flexibility in their payment options regarding when, where, and how they make payments. Vendors should provide solutions that accommodate various payment channels, including both card-present and card-not-present transactions, ACH capabilities, and digital wallet functionalities that support stored payments and tokens. This enables residents to have optionality when paying services regardless of bill type.
• Value-Added SaaS Products and Services
  • Look beyond table stakes. Value-added features help create a seamless and enhanced experience for agency staff. When evaluating SaaS vendors, it is important to consider key features such as a bill presentment and payment solution that can integrate with any back-end system of record. Additionally, an interactive voice response (IVR) system with self-service options can significantly improve the user experience.
  • Keep flexibility in mind. Look for products that require minimal coding, allowing self-service form creation and portal customization, as well as the ability to accept payments. Purpose-built portals that can easily be embedded with your back-end software systems are also essential to consider. These value-added products and services offer significant benefits to agencies and payers.
• Integrations
  • Eliminate disparate systems. Integrations play a crucial role in creating seamless payment processes, ensuring a positive experience for both residents and staff. An RFP should specify that prospective providers must support common integrations, such as POS systems, interactive voice response (IVR), hosted checkout, and direct API connections to the provider's software application. This capability ensures consistent reporting and facilitates the easy addition of third-party payment solutions or vendors.
• Innovations
  • Explore the latest in payments technology. Innovation is an essential aspect of any RFP, especially in the world of payments. Your RFP should encourage vendors to present separately priced innovative solutions for your agency to consider beyond simple payment processing. These offerings might include cash payment options for unbanked and underbanked communities, digital wallets, account updater solutions for recurring payments, 3D Secure (3DS) cardholder verification, least-cost routing solutions for debit cards, enhanced fraud monitoring, and services for interchange analysis and optimization.
• Implementation and Program Management
  • Ensure vendors have a thoughtful implementation approach. Establishing a dedicated implementation team led by an experienced program manager fosters an environment conducive to a successful migration of services. Any implementation plan should incorporate a proven, streamlined strategy for simplifying payment processing within 30 to 90 days. Additionally, the plan should clarify whether the transition will occur in phases or all at once.
• Security
  • Protect your agency and your payers. Security plays a vital role in government payments. While every processor must adhere to a minimum level of Payment Card Industry (PCI) compliance, requiring each vendor to implement compliance training plans enhances collaboration between providers and agencies. Choosing a vendor that not only understands PCI Compliance and NACHA requirements, but also provide the tools to successfully adhere to their organization’s role in compliance.

By considering factors such as provider experience, scope of services, payment channels, and innovations, your agency can enhance the quality of proposals received. Take advantage of the RFP template provided, which can serve as a valuable tool to streamline the drafting process and ensure all critical elements are covered.

Please note that an RFP may not be the best approach for every agency to procure services. Click here to view a few of the most used government contracting vehicles.

RFP Best Practices to Find the Right Payments Partner

Join Tyler and ICMA for a webinar discussing best practices to simplify the payment procurement process and maximize value for your department or agency.