Why make consumers pay more for e-services?

Electronic services have long been touted as a way for governments to improve operational efficiencies and facilitate better communication with their citizens. Offering government services over the Internet not only provides cost savings, it also allows for better service delivery.

So why do some e-services come at an additional cost for consumers?

Over dinner with my cousin on Christmas Day, she related that she had received her property tax bill for 2009. She decided to make her payment to the Inland Revenue Authority of Singapore (IRAS) via the Internet, but discovered that she had to pay an additional "administrative" charge for doing so.

According to the IRAS Web site, online payments made using credit cards are pegged with an administration fee by local bank DBS Bank, to cover "processing charge" through credit companies Visa and MasterCard.

My cousin probably missed reading that part because she only realized she had to fork out the admin fee after she confirmed the transaction. She grumbled about having to pay the additional amount, though only a couple of bucks, noting that she would have paid through the traditional way if she had known.

I don't blame her for thinking so. Why are consumers being made to pay more for e-services when the Internet is supposed to help reduce operational workflow and improve backoffice processes?

In my cousin's case, shouldn't the IRAS absorb the administration fee imposed by DBS Bank instead of transferring the cost to the home owner? After all, if my cousin had chosen to pay her property tax via the traditional way--for example, by cheque--the IRAS would have had to spend more resources and time processing the payment.

Ranked 23rd in the United Nations E-Government Survey 2008, Singapore prides itself for being one of the early e-government pioneers. But if the country wants to maintain its forward stride in this space, it'll need to look more closely at how it's choosing to offer e-government services.

E-services shouldn't just be about offering consumers convenience or more channels to transact, because those reasons alone may not be enough to convince every consumer to turn to the Web. For some, it's also about the difference in cost.

In particular, when it comes to bill payment, consumers will be more than happy to be given any reason to not pay more than they have to. And the IRAS has given my cousin a reason why she wouldn't want to pay her property tax via the Internet next year.