The payment news we focus on this week demonstrates how consumer preferences and digital payments continue to disrupt various industries and the impact request-to-pay functionality will have on real-time payments. Let’s dive in.
Digital payments disrupt the educational services sector
PYMNTS recently released a “Payments In The Education Space Report,” sharing insights into the state of payments in education. It appears the educational services industry is beginning to see the benefits of accepting digital payments.
With digital payments, parents have the convenience to deposit tuition, fees, extracurricular costs, and field trip funds directly to a school’s bank account without needing their children to carry physical forms of money to and from school. Additionally, digital payments mean teachers no longer have to spend time collecting funds from their students while helping “reduce errors and simplify transactions for both online and in-person events.”
Accepting digital payments is an excellent first step towards acknowledging how parents and students want to pay today. It will be interesting to see what other payment trends the industry will implement in the future.
67% of insurance carriers want to digitize payments
The insurance industry is also seeing the benefits of digital payments. PYMNTS released the following statistics:
- 67% of insurance carriers view digitizing payments as an essential part of their digital upgrade plans
- 64% are saying they want to be less dependent on paper checks
- 53% are looking to reduce their internal expenses
By implementing digital payouts, insurance carriers can get claims paid quickly, make handling and reconciling transactions more effortless, and accept payments securely from policyholders. ACH, echecks, credit, and debit cards are digital options that insurers want to include in their digital upgrades.
Consumers continue to embrace emerging payment innovations
Mastercard published a convincing thought leadership piece on Forbes about how new payment technologies enhance the consumer experience.
Contactless payments, biometrics, and digital assets such as cryptocurrencies are changing consumer expectations on what payments should look like now. However, trust remains an issue as the payments industry tries to complete these transactions quickly while maintaining security and preventing fraud.
Still, there’s no turning back as it’s now a digital-first world. While innovations happen, institutions and consumers can be proactive about noticing and reporting activity that may be payment fraud.
“Request to pay” is reshaping real-time payments
According to PYMNTS, request-to-pay functionality can address the challenges that current real-time payments systems face.
Real-time payment transactions are irrevocable after sending the funds, so payors need to know who they are paying and what they are paying for. When payees can send messages to payors asking to settle bills, the payors get the opportunity to confirm payment details. Having this much-needed clarity gives payors the confidence to initiate the transaction.
Still, there are several missing elements that treasury and payments professionals say are necessary to make request-to-pay functions successful for ecommerce. It’s one of many features that the world needs to make real-time payments a reality.
Demand for in-store contactless payment increases
Chain Store Age shared various statistics from a Visa study that shows contactless payments have really grown on consumers, and small-to-mid-sized businesses (SMBs) have noticed.
- 74% of surveyed SMBs expect customers will continue to prefer contactless payments
- 40% of surveyed SMBs cited contactless payments as one of the top brick-and-mortar investments needed to meet customer expectations
- 17% of US SMB respondents started selling online for the first time during the pandemic
The article also suggests SMBs could potentially lose customers if they fail to invest in contactless payment options. According to a Visa spokesperson, “Small businesses who embraced digital commerce and cross-border sales have weathered the pandemic better.”
Understand what ISVs need to know about contactless payments they should offer by visiting our guide.
We hope you find this roundup helpful in staying ahead of the latest payment trends! Keep informed on the payment industry by subscribing to our email newsletter or following us on social media.