Choosing A Digital Wallet For Public Funds: What To Ask About The Technology

Digital wallets can distribute money faster than ever; here’s 5 things to consider and the questions to ask before selecting a partner.

Digital wallets can transform the way constituents receive the public funds designated for them. Imagine not having to wait for reimbursement or paper checks in the mail.

A digital wallet gives instant access to funds through a platform, much like most people have with their personal bank.

Constituents aren’t the only ones to benefit. Imagine if your public office could move distribution of public funds and spend management to a single, easy-to-use platform. Most public fund managers could certainly use more time in the day.

So, what’s stopping public agencies from using a digital wallet for public fund distribution? It’s the complexity of the policy and programs. Ensuring the spending of public funds is compliant and secure is top of mind for most public fund managers.

That’s why it is essential to consider not just the performance aspects of the digital wallet (fast, easy) but the financial technology company itself. You want your digital wallet for public funds to be a reliable and long-term partnership, not just a quick technology fix.

Keep reading for 5 things to consider about the technology when selecting your digital wallet for public funds.

5 Things to Consider with Digital Wallet Technology

1. Digital Wallet Compliance

   Compliance is the essential, non-negotiable factor in any digital wallet for public funds technology to
   ensure and maintain the quality and accountability of public spending. Compliance issues are often the cause
   of why programs stagnate. Policymakers will fund programs based upon a perception of demand. Yet they often
   find themselves months (or even years) later with unspent funds because of compliance-related bureaucracy.

   Ask these questions to ensure compliance with a digital wallet:

   • Are robust internal controls and security processes in place?
   • Do administrators have access to:
     • Set pending guardrails?
     • Automated payments?
     • Real-time auditable reporting?
     • Approval workflows?

2. Digital Wallet Financial Transaction Processing

   To enable a seamless and efficient experience for all customers, digital wallet solutions must securely
   distribute funds to end users and vendors. For this to happen, the technology must provide transparency,
   control and compliance.

   Ask these questions to ensure compliance with a digital wallet:

   • Does the technology enable users to make approved and compliant purchases?
   • Do users have prompt access to the funds they need?
   • Can administrators build custom spending rules and restrictions on how funds can be spent?
   • Does the technology permit authorization for pre-approved vendors and service providers and per
     individual program?
   • Are automated payments and reimbursements available?
   • Are transactions transparent to all parties, and easily traceable?

3. Digital Wallets Data Security

   All data used in digital wallet solutions must remain safe, compliant and controlled at all times.

   Ask these questions for digital wallet data security:

   • Is the technology properly encrypted to avoid cyber attacks and data leaks?
   • Is it SOC 1 Type 2 and SOC 2 Type 2 compliant?
   • Has the technology successfully passed a National Institute of Standards and Technology (NIST) audit?

4. Digital Wallet Reporting Capabilities

   Digital wallet technology must provide transparency in reporting to ensure funds are being used correctly and
   to enable users to make data-driven decisions with confidence.

   Ask these questions for digital wallet reporting capabilities:

   • Can users access real-time spending data so they always know the balance for each funding source?
   • Can the technology provide a comprehensive range of audit-ready reports that are customizable and
     expansive?
   • Do the reporting capabilities identify areas that need improvement?

5. Digital Wallet Ease of Use

   In order to operate efficiently and compliantly, digital wallet technology should allow end users to easily
   use funds for their specific and intended purposes.

   Ask these questions about digital wallet ease of use:

   • Is the technology platform customizable and intuitive to use?
   • Is it accessible to people with disabilities relying on screen readers?
   • Does it meet Web Content Accessibility Guidelines (WCAG) 2.0 Level AA Standards?
   • Is there multi-language support?
   • When appropriate, does the technology permit access to a large set of vendors or marketplaces for ease
     of ordering?

Consider both the Digital Wallet Technology and the Digital Wallet Company

Digital wallet technology has the potential to reshape the way local and state agencies disburse their public funds.

As a public fund manager, take the questions here as a jumping off point to start researching partners. Digital
wallets for public funds should be able to deliver both the technology and the trusted partnership you and your
constituents need. Check out part two of this series where we share what you should ask about the company you partner with.

The right partner helps ensure public funds reach the right people and are used for the right purpose, so you can
shift focus to maximizing your mission.

If you are a public leader tasked with distributing public funds, request a demo to learn how ClassWallet can help!