Challenges for Transformation from traditional to smart payment systems

Updated: Jun 24

The transformation from traditional to smart payments systems by cities has resulted in increased efficiency and security of the payment ecosystem due to reduced use of cash. However, when starting their smart payment journeys, cities often face a number of internal obstacles and challenges that hinder them from achieving a wide-scale adoption of digital payments.

These challenges include:

Inadequate Infrastructure

One of the biggest challenges faced by cities looking to transform their payment systems to smart systems is the lack of connectivity between the cities and technology and the integration process for new technologies.

Few beginner cities have the right infrastructure in place to support effective smart payments transformation. They lack the digital transformation processes, broadband systems, shared & scalable architecture, and other elements needed to facilitate smart development. The infrastructure currently in place is focused on physical modes like cheque and cash and not adequately equipped to accept digital payments

Lack of Smart Governance

Most cities start on the smart payment transformation process blindly. This is more likely to kill the process from the start. Laying the foundation through smart governance is key for building a smart city. Not having in place, a unified strategic vision with a cohesive implementation plan to deliver results in a cost-effective way is resulting in smart payment efforts being less effective.

Creating a policy governance framework and a well-defined future roadmap that encourages innovations and the adoption of payment infrastructure is key in driving smart payment efficiency.

To develop this vision and roadmap, city governments should assess and consider the concerns of citizens and business stakeholders to ensure alignment with their priorities and to get their buy-in.

This means that cities need to paint a clear picture of what they want before embarking on the smart city journey.

“Ensuring your city has a digital strategy in place is key for a successful transformation. To be effective, city leaders need to ask if their digital city strategy is design driven, value led, politically endorsed, and if it delivers a viable ecosystem.”

Jen Hawes Hewitt, Global Cities Lead, Accenture

Inadequate Funding

Financing the smart payment solutions needed to meet the demands of growing populations is a challenge for many cities.

Advanced digital payment technologies are the path, and cities need to develop a framework that will help fund them.

Without proper funding, a smart payment program cannot be fully implemented. It is vital to allocate sufficient funding from both the operating and capital budget.


Without the right vision, plans, and resources in place, smart city payment programs will not reach their full potential. This should form a basis of what cities need to consider as requirements to smart payment transformation.

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