Modernizing payments infrastructure with Public Payments Platforms

A policy kit on how a publicly-owned digital wallets platform can make public administration more efficient, increase financial inclusion, and benefit local economies.

Today, the Democracy Policy Network is launching the Public Payments Platform policy kit—an open resource for legislators, staffers, organizers, experts, and journalists to learn more about how states can establish a publicly-owned digital wallets platform to make public administration more efficient, increase financial inclusion, benefit local economies, and build a foundation for more transformative uses of public funds. 

We started working on this policy kit together after publishing our previous kits — Public Banks and Democracy Vouchers — because a public payments platform is where these two ideas converge. The platform’s digital wallets can provide the basic retail banking services of a public bank, and they provide a more efficient mechanism for disbursing public benefits—such as democracy vouchers—to residents. 

So what is a public payments platform? In contrast with the familiar for-profit model (like Paypal and Venmo) offered by corporations, a public option for payments infrastructure would be transformative. All public subdivisions—local governments, state agencies, universities, transit authorities, etc.—would have access to a modernized, central system for administering “vertical payments”—transfers to and from the government, such as salaries, procurements, taxes, tax refunds, fines and fees, unemployment insurance payments, emergency relief payments, and more. As a peer-to-peer (P2P) platform, the system also allows “horizontal payments” between individuals and businesses, as well.

The innovation comes from the potential to reimagine public benefits that are not immediately payable in dollars—such as tax credits, transit credits, public vouchers (like democracy vouchers), and complementary currencies. With a public payments platform, each of these types of value could become much more “money-like,” because they can be used beyond their current focus. Complementary currencies in particular, such as timebanks and “store credits” with cooperatives, are much more viable in an open payments infrastructure that allows these community-led forms of value to be layered on top. 

The main inspiration for this policy kit is New York’s Inclusive Value Ledger (IVL) proposal. DPN members Robert Hockett, State Senator Julia Salazar, and Assemblyman Ron Kim introduced the IVL legislation in January 2019, and in hindsight, the pandemic has proven their policy to be an even more critical solution then when it was first proposed, as the inefficiencies of state unemployment insurance systems and other public benefits have been made clear in the past year’s crisis. 

This policy arises within a broader national debate around “central bank digital currencies” and proposals for universal access to retail banking such as FedAccounts or postal banking. This remains especially relevant with Democratic control of the White House and Congress—and potential structural policy solutions on the horizon. Movement leaders can lead the way on this conversation at the state level by creating a public payments platforms that incorporates the maximalist vision of community control and anti-surveillance.

If you are a legislator, activist, expert, or journalist looking to help turn public payments platforms from idea into policy, check out (and share) our kit — and please reach out!