e‑Government and Financial Transactions: Potential Versus Reality

Abstract

Some of the most challenging e‑government applications involve allowing citizens and other customers such as businesses to conduct financially related transactions electronically with governments on a 24‑hour, 7‑day a week basis. There has been little empirical research on the utilization rates of on‑line financial applications. This paper reviews existing data concerning usage rates and presents new data from governments at the state and local levels concerning the usage rates of these online systems. Generally, usage rates are low, demonstrating that there is a gap between the potential and reality of this form of e‑government. Statistical tests showed that convenience fees have a negative effect on usage rates. There were also statistically significant differences among applications. Population size was not significantly related to usage rates. Our qualitative data suggest that governments can affect usage rates by providing incentives to employ online transactions andor penalties for making payment by manual methods. Governments may also improve their usage rates by making their websites and applications accessible and easy‑to‑use as well as by extensively marketing these applications. Finally, the intrinsic advantages of the applications themselves compared to traditional payment methods affect usage rates.