Is it possible to have too much choice?
Not really, when it comes to “how to instant.”
Instant payments present a world of possibilities for creating better consumer experiences. The concept is simple and intuitive. Offer customers 24/7 access to on-demand funds, how and when they want them. Simply put, let consumers get paid the same way they pay you. Give them the most choice possible, payment by payment if necessary.
But delivering on that concept and providing instant, on-demand payments with choice isn’t that simple. It involves more than providing immediate access to funds by connecting to a rail’s API or even a couple of rails’ APIs.
Instant payments have to be secure, risk-managed, and in line with regulatory requirements. Requirements that may vary by state, like with insurance claims payments. They have to work for different businesses that want to push those funds instantly and for consumers who want to receive them in different ways. They have to work within a company’s customer care ecosystem, and they have to offer consistent omnichannel experiences.
Overall, the companies that offer the best, most convenient customer payment experiences will be the winners. The companies that don’t, won’t. No matter what payment rail they choose.
The More ‘Rails’ the Merrier?
Over the last several years, we’ve seen instant payments emerge among P2P marketplaces and the upsurge of volume on platforms like Venmo. Then, they gained traction in the gig economy, where the ability to pay workers instantly became a major competitive differentiator for marketplaces looking to attract workers. Those two things were really the catalyst that turned instant payments into a tidal wave in the U.S.
Now, “instant” has spread to lenders, the insurance industry, payroll departments, restaurants, airlines, and more. One of the biggest emerging areas includes AP automation solutions for B2B and B2C payments.
Payment options are also expanding. It used to be the two go-to’s were push-to-card options via the card rails, Visa Direct and Mastercard Send. There are now push-to-card services for challenger banks and payroll providers, as well as push-to-wallet options for PayPal, Square Cash, Apple Cash, and others. Not to mention emerging account-to-account services like RTP from The Clearing House, and Same-Day ACH.The launch of the Federal Reserve’s FedNow system has only heightened the importance of fast access to funds for businesses and consumers.
From Ingo’s perspective as a disbursements marketplace, the more ‘rails’ the merrier. More options mean more choice for consumers and small to medium-sized businesses in how to receive instant payments.
Navigating What’s Next
The goal is to create brand ubiquity by offering consumers and SMBs a choice in how to be paid. They should be able to choose from a mix of cash, debit, credit, digital wallets, and even checks, all payment methods supported by the merchants they do business with. Forcing consumers or SMBs into a particular instant payment method won’t work because that’s inconsistent with how they decide to pay today.
The future of instant for banks and corporates is putting as many options on the table as possible and letting the customers’ preference be their guiding principle. Brand ubiquity then becomes a function of choice.
It is likely that there will never be a single winning rail, so the question of choosing the “right” one is beside the point. The better question is what type of experience banks and corporates are trying to create for that consumer or SMB and what’s required to deliver the maximum number of levers to create ubiquity across all of those endpoints and end users.
