Payments Execs Map Out What’s Next- 2018 Predictions

July 2, 2018

Transforming The Last Mile

One of the most important changes in the first six months of 2018 has been the accelerated digital transformation of the last mile of payments.

The turn of the calendar year saw key early adopters in specific verticals like lending and insurance embrace the idea of push payments for corporate disbursements. But the speed at which that transformation has recently pushed throughout industries and expanded into new verticals signals the faster-than-anticipated arrival of the instant money economy.

Driven by consumer demand, the instant money economy first took root in the consumer P2P market through smartphone apps. Informed by this experience with P2P and their expectations that everything conform to life at web speed, consumers then let it be known they wanted companies to pay them in the same fast, convenient way they paid those companies.

In response, early adopters like ADP, OnDeck and PayPal turned to push payment technology. This approach essentially reverses a debit transaction, enabling instant, fully guaranteed funds to be deposited in the same card accounts or wallets that consumers already use and trust. Think loan proceeds instantly sent to a small business debit card or an insurance claims payment to a PayPal account.

The market for these corporate disbursements is much larger than debit transactions. In fact, it’s 4x larger than debit, globally.

The transformation of the last mile in corporate disbursements is key to building consumer loyalty and satisfaction as well as eliminating the cost and time delays of paper check and ACH processing.

Consumers value the convenience, certainty and choice of these payments. The ability to direct money to nearly any financial account, and to take payment of guaranteed funds 24/7 – even on weekends and holidays – is far superior to either paper check or ACH. In turn, consumers reward companies with repeat business and high marks for satisfaction.

At the same time, studies have shown that it can cost companies up to $10 per paper check issued. Moving to a digital platform with 99.4% first-time guaranteed delivery success that is predicated on consumer convenience and self-service contributes mightily to the company bottom line.

By early 2018, more companies were moving to this digital option with obvious verticals like consumer and small business lending as well as travel reimbursements and insurance. But as the value proposition became undeniable and word of mouth spreads about the mix of consumer and company benefits, new applications and verticals began to rapidly emerge.

One of the more interesting sectors to embrace push payments and instant money has been Treasury Banks. They understand that their corporate customers across industries want the benefits of instant money, but do not want to build their own solutions or search for vendors. Using a platform like Ingo Money, these banks can seamlessly integrate push payments into their Treasury offerings so that clients have a simple activation option for instant disbursements. This helps cement long term client relationships while adding new lines of revenue.

Another has been the rise of Same Day Settlement for merchant transactions. By deploying push payments in service to merchant customers, leading processors like Paysafe can close the traditional two-day transaction settlement window for transaction receipts. This puts money into the pockets of merchants immediately and provides them with a competitive advantage.

All in all, this adoption within verticals and expansion into new applications and industries will continue to accelerate over the course of 2018. We have truly turned the corner on real-time payments and the Instant Money Economy, making this the year we finally #KilltheCheck.

Drew Edwards
CEO at Ingo Money

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