Organizations responsible for collecting taxes and public utility payments are required to process an extremely large volume of back-office processing. A major factor behind this workload is that the operations still rely heavily on printed payment statements. Handling paper—sorting, transporting, and storing it—incurs significant time and cost. In addition, financial institutions face strict time constraints when sorting and transporting documents because they must meet reporting deadlines to local governments. To address these challenges, the Ministry of Internal Affairs and Communications is promoting a full-scale digitalization of payment collection operations. Toshiba Digital Solutions has developed a platform service that securely connects financial institutions with local governments and public enterprises through a cloud-based infrastructure, shifting operations from paper-based processes to digital‑data‑based workflows. In this article, we introduce this platform service, which enhances the efficiency of payment collection operations through efficient digitalization of payment statements and secure data sharing.

The Ministry of Internal Affairs and Communications is promoting local government digital transformation. This initiative aims to fundamentally improve administrative services and operational processes by leveraging digital technologies and data, thereby enhancing convenience for residents and improving administrative efficiency.

As part of this initiative, efforts are underway to digitalize the collection of public funds.
For local taxes, several systems have already been deployed. These include eLTAX—a nationally unified portal system that enables online filing and payment—and the use of QR codes printed on payment statements (“eL‑QR” unified QR codes), which allow electronic payments through smartphone payment applications or financial institutions that support eL‑QR. Furthermore, beginning in September 2026, the government plans to extend the use of eL‑QR beyond local taxes to include certain public payments such as insurance premiums and water charges. To prepare for this expansion, updates to eLTAX and related legal frameworks are currently underway.

The conventional process for paying taxes and public utility charges is illustrated in Figure 1. Local governments and public enterprises mail payment slips (payment statements) to individuals or businesses (Fig. 1 (1)). Recipients then make payments at financial institutions or convenience stores using the payment statement (Fig. 1 (2)). The funds and the physical payment statements are subsequently routed—through separate channels—to designated financial institutions that have been entrusted with the collection of public funds (Fig. 1‑(3)).

These designated financial institutions perform payment processing and enter the payment information as data. They then sort the data and payment statements by destination and tax item and report them to the respective local governments or public enterprises by the prescribed deadlines (Fig. 1‑(5)). Because original payment statements must be included in these reports, physical transportation is required. In many financial institutions, these tasks are handled by centralized administrative centers. As a result, payment statements must be physically transported from individual branches to the administrative center (Fig. 1‑(4)).

Local governments and public enterprises then perform reconciliation by comparing expected payment information (ledger entries), the payment information provided by financial institutions, and the amounts received into bank accounts. When the information matches, the ledger entries are cleared, and the payment statements are stored. To locate a specific payment statement, staff must manually search through the documents, and retrieval of stored documents requires first identifying the correct warehouse.

Payment statements with eL‑QR codes can be scanned to enable electronic payment, either through eLTAX-related websites or via smartphone payment applications. Even when a payment statement is brought to a financial institution’s counter, eL‑QR can still be used in the subsequent administrative processing after payment is received, allowing financial institutions to improve operational efficiency. Although the use of eL‑QR is expanding year by year, several issues remain. One major challenge involves handling large volumes of corporate payments at teller counters.

Companies often need to pay multiple types of taxes—such as corporate inhabitant tax, business tax, and property tax—across multiple local governments, using large numbers of payment statements. For instance, a rental car company typically owns many vehicles at each branch, requiring it to process a significant number of motor vehicle tax payment statements across multiple local governments. Electronic payment using QR codes is fundamentally performed on a per‑statement basis. For this reason, many companies find it more efficient to bring all payment statements together and make the payment at a financial institution. Companies must also address additional issues, such as integrating payment data with accounting or enterprise resource planning (ERP) systems, managing risks such as fraud or erroneous payments in smartphone-based transactions, and handling the mixture of tax items that support eL‑QR and those that do not.

Financial institutions must continue to maintain their over‑the‑counter services both to accommodate the large volumes of corporate payment statements brought in and to handle printed payment statements, which are unlikely to disappear entirely even as electronic payments increase. Financial institutions must continue to maintain their over‑the‑counter services both to accommodate the large volumes of corporate payment statements brought in and to handle printed payment statements, which are unlikely to disappear entirely even as electronic payments increase. Therefore, reducing the volume of paper transport and improving operational efficiency is becoming increasingly important to support the various ways in which individuals and companies make payments.

To address this situation, Toshiba Digital Solutions offers a system that enables financial institutions and local governments to securely share image data of payment statements.
If local governments can review payment statements using image data, the use of paper—and the associated transportation and storage—can be eliminated. At financial institutions, payment statements can be converted into image data at branch offices, after which all subsequent tasks can be performed using the data alone, eliminating the need to transport physical documents from branches to administrative centers. Operational efficiency is further enhanced through the use of optical character recognition (OCR) technology. By extracting information from payment statement image data and converting it into text, OCR reduces the work previously required to enter payment information manually while referencing printed documents. Effectiveness is further increased by leveraging OCR technology that not only offers high recognition accuracy but can also recognize QR codes and barcodes.

These functions are all enabled by the Payment Collection Shared Service Platform for Cloud (“Payment Collection Cloud”), Toshiba’s platform service for payment collection operations. The platform consists of three services: the Image OCR Service and the Payment Collection Application Service, which streamline operations within financial institutions, and the Image Reference Service, which enables information sharing among financial institutions, local governments, and public enterprises. It can be deployed flexibly depending on customer needs—either as an integrated solution, in phases, or as individual services (Fig. 2).

The development of Payment Collection Cloud builds on Toshiba’s track record of providing on‑premise payment collection systems to approximately 50 financial institutions nationwide to improve the efficiency of their operations, combined with advancements in digital technology and recent government initiatives. To further improve financial institution operations, Toshiba has enhanced these services and transitioned them to a cloud‑based architecture.

In practice, The Fukui Bank, Ltd. has already begun operating the Image Reference Service jointly with all local governments in Fukui Prefecture. Their goal is to gradually eliminate the use of printed payment statements, significantly improving operational efficiency and reducing costs. Local government staff have provided a variety of comments about the new system. They note, for example, that whereas they previously could not confirm payment statements until two days after payment, they can now perform next‑day confirmation. They also report that, in the past, locating a specific payment statement required searching through documents one by one, but they are now able to find the relevant document immediately through data search. In addition, they mention that the ability to obtain payment statement data in CSV format has supported secondary uses such as aggregation and budget planning.

Implementing the image reference service—which allows financial institutions and local governments to share image data and payment information in the cloud—requires several important security measures.

First, compliance with security standards widely used in the financial industry—such as the safety measure standards of the Center for Financial Industry Information Systems (FISC)—is essential. Based on these FISC standards, we created a checklist and confirmed that the image reference service satisfies all of more than 100 items across 12 categories, including data protection and prevention of unauthorized use.

Another important aspect is security on the local government side. As a general rule, local government systems cannot be connected directly to the internet or to wide‑area networks. Instead, they operate securely by using the Local Government Wide Area Network (LGWAN), a private network physically isolated from the internet. In addition, because payment statements include payer information, compliance with the Act on the Protection of Personal Information is required when sharing such data over networks.

To meet these security requirements, we separated the networks of financial institutions and local governments and restricted the types of data shared in the cloud.

Our Payment Collection Cloud, including the image reference service, is hosted on Amazon Web Services (AWS). Each local government is assigned a separate tenant to ensure security. Furthermore, Virtual Private Clouds (VPCs) are used to isolate the private networks of financial institutions and local governments and maintain security between them. Closed‑network communication for both financial institutions and local governments is achieved through Flexible InterConnect (FIC)^*—which enables secure connections to various cloud services via private networks—and through Arcstar Universal One^*, a virtual private network (VPN) (Fig. 3).

^* Flexible InterConnect and Arcstar Universal One are services offered by NTT DOCOMO BUSINESS, Inc.

To further strengthen security, the data shared via the cloud is limited to text files and image files in accordance with guidelines issued by the Ministry of Internal Affairs and Communications. By separating networks in this way and restricting the shared data, the image reference service has been registered as an LGWAN‑ASP service by the Japan Agency for Local Authority Information Systems (J‑LIS), enabling local governments to access it via LGWAN.

Now let’s look at the services offered by Payment Collection Cloud—which operates within a secure cloud environment—and the key features of each service.

The first service is the image OCR service. It uses AI OCR Synchro+^*, a cloud-based AI OCR service that Toshiba has refined over many years. Images scanned at financial institution branches or other sites are sent to the cloud, where OCR processing is performed. Because no special‑purpose scanner is required, branches can make use of their existing scanners or multifunction printers. Another notable feature of this service is that, in addition to recognizing text, QR codes, and barcodes, it also supports the eL‑QR format. Moreover, users can take advantage of AI OCR functions without having to register “models” such as payment statement identification methods or scanning positions. Because the service is cloud-based, there are no restrictions on scanner locations or work sites.

^* AI OCR Synchro+ (formerly called AI OCR Service) is introduced in more detail in this article.

Next is the payment collection application service. This service supports financial institution operations such as entering payment information, verifying entered data, and generating reports and other forms. Work efficiency is improved by the use of data entry screens specifically designed for payment collection operations. The service can also leverage OCR output from the image OCR service or output from OCR scanners located in administrative centers. Because processing is performed in the cloud, work can be distributed across multiple sites. This improves flexibility, for example, during peak periods or in emergency situations such as disasters.

The last service is the image reference service, which enables data sharing between financial institutions and local governments. Payment statement formats, sorting methods, and the attribute information that must be digitized are not standardized nationwide and differ from one local government to another. This service utilizes Toshiba’s cloud-based document management service to create versatile definitions for the attribute information and to manage the registered data in a structured way. Local governments can search for payment statement image data and payment information using attribute information as search keys. Payment information can be obtained in CSV format, allowing it to be used for aggregation and other processing. Since view permissions can be configured for each data set, the service can also meet the security requirements of both financial institutions and local governments.

Improving the efficiency of payment collection operations is vital for both financial institutions and local governments. While the use of eLTAX and eL‑QR is becoming more widespread, completely eliminating procedures that rely on printed documents remains difficult. To enable individuals and companies to make payments with confidence, Toshiba Digital Solutions focused on efficiently digitizing payment information to reduce paper transport and on maximizing the benefits of digitized data. The result is Payment Collection Cloud.

By using OCR to capture payment statements and streamline the digitization of payment information at financial institutions, it becomes feasible—for example—to consider having financial institutions provide reconciliation data that local governments have traditionally prepared. This can serve as added value on the financial institution side and improve operational efficiency on the local government side.

Payment Collection Cloud provides a better framework for both financial institutions and local governments and helps advance digital transformation. It can be deployed as a comprehensive solution for greater overall impact or introduced as individual services—Image Reference Service, Image OCR Service, or Payment Collection Application Service—to improve specific operational areas. We encourage you to begin using the platform and evaluate its impact. Toshiba Digital Solutions will continue contributing to operational transformation across industries.