Boston Rebuilds Payments to Simplify Municipal Money Flows

This is Monday Conversation, a PYMNTS Podcast. Karen Webster sits down with the visionaries behind the trends for the stories shaping what's next in payments and commerce. In this episode, Boston finance manager Rich Andrade and Passport CTO Gene Rohrwasser sits down with PYMNTS CEO Karen Webster to discuss how the City of Boston is building a unified payment platform.

Hey Rich. Hey Gene. Thanks for joining me today. I'm looking forward to our conversation about the launch of Passport Payments and in particular how it fits into the Boston, the City of Boston's efforts to more effectively and efficiently collect parking tickets, parking payments, and other now small dollar municipal payments. So thanks so much for taking the time. All right. So listen, Rich, as a resident of the city of Boston, I'm keenly interested in how all this is going to affect me since it really is just all about me. But uh but but seriously, um Boston, I know, has been pushing pretty hard to modernize how residents engage with city services, including how parking and now all small dollar payments are collected and reconciled. So to start the conversation today, um I'd love to understand how Passport payments fits into that evolution and what, if anything, has already changed for the city.

All right. Well, I'd like to think that uh the city wanted a system that could really unify our operations just to make the city more livable overall for residents and uh easier to navigate for visitors as well, because we do get a large volume of transactions that fall in our uh touristy area around Quinty Market, City of Boston overall, uh downtown. And um and just wanting to work with Passport to help shape a solution that for many decades was, you know, just more of a patchwork legacy system that uh required, at least on my end, as a finance manager, dealing with multiple um vendors, which I won't say their names, but dealing with having a primary and then dealing with additional five or six other vendors just to reconcile several bank accounts. So what Passport has done, they've consolidated those six and seven websites into this one platform, um, which we use, uh we've been using since July 1st. And um so far, again, from my perspective as finance manager, it's almost reduced my workload by about almost 40%. Wow as far as searching for data, pulling data from various um entities. So I've been super grateful for that aspect of the system and bringing that modern feel to the city of Boston.

Yep. I mean, Gene, I'll I'll kick it to you. My my understanding is that Passport Payments was co-created with Boston and Rich's team. And I'm curious to know how you moved from managing the curve, which is what Passport is all about, or certainly was all about, it's it's it's its roots to now all small dollar payments across the city municipality. Were there specific payments blind spots that cities like Boston identified that shaped how you designed and launched the product?

Yeah, so Passport payments was built in partnership with with Boston, and it's it is a purpose-built solution for the public sector. Cities, city of Boston, cities across our nation, they're very dynamic. There's a lot of moving pieces, there's a lot of constituent interactions for the millions of people that live and will visit these cities. Uh, and the flow of dollars is is a complex, the flow of dollars is a complex function of the city. It's also the most important function that these products serve to exist. And across all of these point solutions, all the constituent um interactions, as you just heard from Rich, those things were being managed in disparate places. So the flow of funds from the end users all the way to what was ultimately being remitted into the city's bank accounts for those funds to be read uh redistributed, that was being orchestrated in spreadsheets and one-off systems to make sure that the activity that happened on this particular day, week, month, or year was that those funds actually transitioned into the bank account. Um, and when you're doing things manually across disparate systems, things happen, the accuracy is low. Bringing that in-house with connectivity from the way that we interact with constituents all the way through to the funds that are floated into the city's bank account, making sure you have direct connectivity to those things is something that Rich and his team certainly brought to the forefront. What they brought to the forefront was the level of scale that the city of Boston brings that has a ton of applicability to other cities across the nation, particularly when it comes to payments.

Rich, besides payments, uh parking payments, and and obviously citations when uh you your your your meter extends um or or your payment does not extend beyond the uh the time that you've you've you've paid for. What are some of the other payments that you're able to manage now with Passport payments?

Um well, it's more or less integrating our pay by web, pay by phone, and um kiosk systems. As Jean mentioned earlier, there was just so many various pots of where funds were being um reconciled. And just wanting to bring that accuracy, that transparency, even in the accessibility to the residents, too, because prior to this Passport payment system, constituents really didn't have a foothold in being able to manage their own profiles within the respective the prior system. So now it's more interactive with the constituents, they're getting notices um sooner by email um andor text messages that make Gene, correct me if I'm wrong, but I do believe they may even receive text messages. That's right. So it's really exciting that what we're doing is setting a precedence of modernizing the overall city of Boston's um foundation of how we process payments. We have various other city departments that um use other sources as well. But what Passport brings us is streamlined up-to-date um technologies that are just going to benefit us as the years go on.

Was there was there anything, Gene, about your assumptions about what someone in Rich's role would require and the actual sort of financial integration reality of what was necessary to deliver the product that is in market today?

Yeah, absolutely. I think when when we start, right, the security, data quality are top of mind and top of mind for us in any environment in which we operate. But what Rich's team brought to the table was the identification of additional user personas that we wanted to make sure that the product could solve for. So Rich, as the head of the department, represents one user persona. He has an operations team, he has folks that are um reconciling daily cash, daily web, daily credit and debit payments, and having a robust understanding across all of these user personas allowed us to make sure that we're not one, not making the wrong assumptions, but two, delivering a product that accounts for all of the capabilities, all the data reporting, and all the functions at each one of those user personas that represents each organization inside of Rich's remit, making sure that we're accounting for all of those.

I mean, Rich, when you think about the project management of something like this, given the existing systems within the city of Boston and all the requirements for data integration, data organization, and so forth, what were the biggest points of friction that you wanted to overcome and how challenging was execution once you got right into it?

Um, initially, the entire parking violation system prior to this was built off of RFP. Our operations really were spread across so many different systems. I said this earlier. Um, we have overall parking enforcement, our permits, um, even the enforcement and citations, special collections. There's various uh methods of where Gene touched on point earlier where there could be you know room for error, right? And what Passport did was unify these workflows in a way where they streamlined it to reduce the overall manual work. And I feel like I'm repeating Gene here, but I'm seeing it from my perspective on the departmental side, and breaking down such a complex uh contract uh took us, RFP took us almost four months, right? Just to kind of get to where we wanted to set it up, where it's currently set up with modules, right? Four different modules. And uh trying to get away again from that legacy system, what Passport did was just the partnership was just amazing. Again, all the reportings, 40 years worth of using the system the same way and trying to change people's uh work habits as well. There's so many variables that came along here, but in the end, the support from Passport, especially in that first um towards the end of the fiscal year in June into the new fiscal year now was just phenomenal. Um, and it allowed us to put out a product immediately.

I mean, Rich, you you you mentioned that um the implementation or the the the system now saves you and your team about 40 percent of the time that was required previously to do what you did. And I'm curious, what are some of the other KPIs that you're using? I mean, are there are there payment oversights or billing errors or other things that you've also seen um resolve or be reduced as a result of implementing sort of a single view of flows from all different uh inputs?

Yes, I see it specifically on the reconciliation side. Whereas I mentioned the 40% really tied more to the banking in my role, whereas the other divisions um they have seen an increase in workload, but not enough where it's a waste of time. It's just we are doing more quality control versus everything being done in volume, and and that's what this system truly brings quality over quota to me. So um in again, unifying how these systems are now, it's allowed me to report a cleaner, more accurate, real-time, not waiting four or five days for payments or batches to clear, right? Um everything is happening real time in in this Passport system.

So, Gene, when when you think about um the broader sort of remit of Passport payments and what it's bringing to cities across the United States, I mean, how exportable is Rich's experience, first of all. And then secondly, when you think about just the overall experience, not just for those who are working for the city, but the tourists and the residents of cities and their experience in interacting with these um with these different business units that represent the cities in which they live and visit. Um how how relevant is the experience again across across all the different cities in the in the country that you're currently working with?

Yeah, great question. So the the answer to the first question is very and luckily Passport works with other over 800 cities. Yeah, all these private operations across North America. And so the applicability to um to the the to the inputs and the ultimate product output that we got in partnership with with Richard's team is is incredible. Um, we've been able to roll it out across hundreds of other customers as we sit here today. And the benefit that Passport has in operating at scale is one, being able to crowdsource a lot of these inputs and making sure that we're refining a product that that's best in breed and can go to market across those 800 cities, but that we also have a technology platform that sits behind it and can absolutely support that scale. Um, to give you a fun fact, in the mornings, when just as a byproduct of human behavior across across the nation, the Passport platform will process over 800 transactions a second. And so that's done, of course, because functionally it meets the needs of the teams like Rich's team, uh, but can scale across the nation and support the nuance to the requirements, but also to the actual to the actual processing volume needed. Um, to your second point, as it pertains to the tourist experience or the constituent experience, the end user experience, that's where the journey starts with all of these dollars. So it's the purchase of a parking payment, it's purchase of a permits, paying a citation, the flow of those dollars all the way through, ultimately what lands in the city's bank account so they can redeploy that capital. But having a seamless experience there absolutely pays dividends. What we're talking about happens in the back office and the reconciliation and the remittance of funds. Having a strong user experience at the top of the funnel drives that adoption, drives the high volume that I just referenced there, and also just makes the city have a touch point with their constituents that feels good, that feels modern, that meets them where they are, is intuitive and easy to use.

When you talk about expanding beyond parking and that related ecosystem to other small dollar, high-volume transactions, what does that look like for Passport? And what are some examples of what those transactions are?

Yeah, so Passport exists to serve our customers, to serve the public sector, to serve the municipalities. And so as it pertains to the applicability of the technology across other municipal payments, the the um the sky is the limit there. Right now we're focused on the specific transportation sector and some of the functions that we talked about in partnership with Rich's team. But as it pertains to other avenues inside of the city, the platform is absolutely built and equipped to handle those.

When you decided to sort of co-create this with a city, why did you pick Boston?

So Rich talked a bit about um the procurement process, the implementation process, and the project management oversight that goes into something like that. But what the team brought to the table was truly something unique in the 15 plus years that Passport's been in business that we haven't seen to that extent. And what they brought was a level of discipline and professionality and a level of buy-in from their organization that made an implementation at this scale go as well as it did, number one, and be able to start processing payments within minutes after turning on the system. That happened because of the engagement from both sides, from the city and the way that they um brought to bear the resources for this project, and of course, from the Passport side as well. But the way that they presented throughout all of this, we knew that they were a partner that's absolutely invested in getting forward, both as an operation, but getting forward on behalf of their citizens, it's all rooted in payments. Um, and they they showed up with that on day zero, and it's something that we leaned into as well. And so um differentiated differentiated leadership um at scale uh in a fantastic city that we all love.

Well, I love it. I live there. Um, Rich, would I be surprised at how many people get parking tickets in Boston? I'm not one of them, by the way. I try to be a very good citizen.

The city tends to uh over the last five five to ten years, we've averaged anywhere between ticket issuance of one to 1.5 million per fiscal year, uh, which is brought in a substantial amount of you know uh revenue to the city of Boston. I hate using the word revenue, but let's just use it for conversation's sake. What it is, and yeah, and so um everything really what we're doing is about making the city need people be able to navigate the city easier, especially with all the changes we have on the streets. So um overall we are on pace to really bring a quality system/slash service to the city of Austin that I feel is only getting better. Um what some aspects of this uh curbside management solution contract with you know, partnered with Passport, is that we forget the other uh departments that make up cities, you know, the transportation department as a whole. And um, we have our parking enforcement division, our toe and hold division, we have our operations division, which consists of signals and street sign and the sign shop. Um, we also have the meter shop and in my office, the parking club, we have our correspondence, hearings division, hearings and adjudication, fleet, which um is a division and of itself that manages large fleet vehicles um who pay their citation on a monthly basis, and uh including my finance, we also have the uh permits division and our cashiers. Mind you, the tola also has cashiers in kiosk, so all that's been brought into one. And I can't, and that's just we also have our you know, gov. So we have so many things going on in in this department, and that over 40 years it was being ran in a in a manner that was kind of archaic. So teaming with Passport was the only way I feel uh once we put this RFP out, there were over 14 City of Boston employees involved in this entire RFP process from the very beginning to awarding it. And um I can't help but give them all credit because it wasn't just me, you know, it was it was a collective of us.

If we were to have this conversation 18 months from now, um what would what would have changed? What would we be talking about then that we're not talking about now? And and and maybe and maybe vice versa. Rich, I'll start with you and then Gene, I'll give you the last word.

Well, well, hopefully, hopefully we won't be issuing too many tickets to driverless vehicles. I had to throw that out there. Um but 18 months from now, wow. Yes, I I could eighteen months from now, I could see a potential of other city departments kind of leaning towards what we've been able to do with what we've had for so long. Um again our the transportation department as a whole has always been super innovative, whether when you look at the hardware, I mean just look at Park Boston, the app. So that's also included in this whole payment processing portal, which is really, really, really amazing.

Yes, it does uh it does make the the parking experience easier because you can uh you can add to the meter if you're not right there at your vehicle in order to avoid getting a ticket, which is also part of your remit. So we we wanna we want to avoid the tickets and manage things digitally. Do you know? I'm gonna leave I'm gonna leave the last word to you. I mean, what will be different 18 months from now with respect to the deployment in Boston, but as you think about its scaling across the United States?

Yeah, I think the city of Boston has they're led by visionaries, Rich and his his team being a core part in that. Payments, of course, being the backbone of what's driving a lot of this innovation. And there's a lot in the way of how we can further use this data from the curb all the way down to the payment data that can further transform the city's operation, further find more efficiencies so the staff can continue to move up the chain or shift left and work more strategically, create more value for the city, create more value for the constituents and the flow of funds and where the team was spending a lot of time historically, that can be reallocated to higher value, the highest value exercises as possible. When I think about that as a CTO here at Passport, think about how that can be further compounded by the use of artificial intelligence and how we can take some of these tasks that maybe are a degree or two removed from the payment itself and the movement of money to the city's operations to further find those efficiencies, to further return more value back to the taxpayers of the city of Boston. And of course, as we talked about earlier, that has a ton of applicability across the other 800 other cities that that Passport serves.

Excellent. Well, thank you, Rich. Thanks, Gene, for giving us an insight about Passport payments and its impact on cities and particularly transportation services, how they are paid for and managed from both the constituents' perspective and also those who work to serve them. Thanks again for your time and congratulations on the launch.

Thank you. Thank you, Karen.

Thast's it for this episode of the Payments Podcast: The Thinking Behind the Doing. Conversations with the leaders transforming payments, commerce, and the digital economy. Be sure to follow us on Spotify and Apple Podcasts. You can also catch every episode at PYMNTS.com/Podcasts. Thanks for litening.