Xerox, Rochester Strike E-Payment Partnership

With an eye on striking similar deals nationwide, Xerox Corp. has built a free electronic payment operation for Rochester, NY. In return, the company will keep all of the online processing fees, which range from $1 to $3 per payment.

Beginning last week, Rochester residents could log onto and click on the E-Gov Online Services link to pay water bills and parking tickets. Electricians can also file for permits online.

“We have been committed to streamlining our services to be more efficient and timely, and this is one more step along that path,” said William A. Johnson Jr., Rochester's mayor. “It's another action for taking care of business. People can take care of important functions without having to come to City Hall.”

Mike Piersa, general manager at Xerox's E-Gov Online Services, said the deal with Rochester is the first of many it hopes to make with cities throughout the country.

“We expect to obviously be a major player in this market as we are with our traditional offerings in the public sector,” he said.

Forrester Research estimates the online payments made to federal, state and local governments will reach $602 billion by 2006. While larger vendors such as IBM, EDS and Delloitte & Touche have captured a majority of the Federal e-government business, the local arena is still “wide open” for new e-government vendors like Xerox, said Jeremy Sharrard, a Forrester analyst.

Xerox wasn't the first company that approached Rochester to bring the city online, according to Johnson.

“The others were start-up companies and there were questions as to how effective their services could be,” he said. “Some of them were trying to get us to sign up before they even had enough capital.”

Johnson said he settled on Xerox because of their Rochester history, established brand name, and new business plan.

“They are homegrown because they started here in Rochester,” he said. “Since they are taking their technology and trying to move it into this different niche, we saw this as an opportunity. For us to be able to support a homegrown company is an added benefit.”

Xerox uses a multi-layered Internet security system to handle Rochester's transactions. The servers are located in a protected facility and credit card information is stored on a database not connected to the Internet.

“Xerox has made it clear that they will keep this information very secure and that they won't sell, share or divulge it,” said Johnson. “We don't want to sell e-mail lists or go after advertising because that means you have to deal with complaints.”

Eliminating complaints from residents about mailed fees that were never received was a big factor in Rochester's decision to create the service.

“We get complaints from people who say they've put their check in the mail on time and wonder why they are getting charged a late fee,” Johnson said. “Parking tickets can carry a stiff penalty. When people pay online, the transaction is recorded and cannot be disputed. This also saves us time and money from having to respond to people's complaints.”

The city eventually plans to expand accepted payments to include property taxes and building permits. Alarm permits, dog licenses and other forms can be printed or filled out online. Residents can opt-in to receive notice when new services are available.

Johnson said he does not know how many Rochester residents are online, nor does he have an estimate as to how many residents will use the service.

“And we are not eliminating offline services because of this,” he said. “This is an additional option for people.”

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