Curtis Webb, Vice President, Emerging Payments - Product Management at Meta Financial Group & MetaBank
Last year, research showed $328 billion was transferred via digital, peer-to-peer faster payment options. PayPal, Venmo, and Zelle. As our culture becomes more on-demand, these payment methods are exploding in popularity. And with this trend comes a growing consumer demand to receive payments from businesses more quickly. According to new research, there’s an opportunity for companies to grow their business, only by rethinking the ways they’re making these consumer disbursements.
Faster payments allow businesses and payment service providers to push funds to consumers in near real-time. They enable direct deposit of business-to-consumer (B2C) disbursements like rebates, refunds, insurance claims, and tax refunds within a few days or even minutes. Worldwide, the industry is worth $6.8 billion but MarketsandMarkets™ forecasts it will reach $25.9 billion by 2023.
Now, new research shows faster payments offer companies the opportunity to meet consumer demand while growing their business. Faster Payments: What Consumers Want from Businesses in 2019 examined consumer preferences for receiving payments from businesses and is based on the responses of more than 1,200 U.S. adults. The survey was conducted independently on behalf of MetaBank in May 2019. According to this new research, companies should consider adopting faster payments for three key reasons:
• Faster payments can drive customer retention and loyalty. 2018 Visa research showed 62% of consumers would opt for a quicker payment method for B2C disbursements, if available. MetaBank’s new study confirms the desire for faster payments goes much more in-depth and could be a game-changer for businesses. Consider: Nearly half of the consumers(47%) would be more willing to do business with a company again that offers disbursement options available in minutes, via their debit cards. Since research shows acquiring a new customer is at least five times more expensive than retaining an existing one, these findings could add up to serious business returns.
• They also have the potential to drive new business. A small but mighty 13% would be willing to switch insurance providers to one who offered faster payment of claims. For tax time, many survey respondents select their preparers based on the speed and convenience with which they’ll receive refunds. According to the survey, 65% would choose a preparer who provides their returns via a direct deposit option.
• Businesses need to consider digital faster payments to keep up. Paper checks cost businesses a lot, per NACHA as much as $3.15 per paper check written. This new research shows there may be hidden costs associated with paper checks, too — one-third of those surveyed would be less willing to do business again with a company if it pays them via check. With consumer preferences for B2C disbursements shifting away from tests, companies can keep up — and possibly get ahead — with faster payments.
Those in financial services should take note: this study shows an opportunity to contribute to business growth, by merely rethinking B2C disbursement options.