Digital wallets, instant payment key for FIs
Digital payments are quickly becoming the new normal in the world, with more than $ 6.6 trillion in digital payments expected to crisscross the world this year.
This growth is not expected to slow anytime soon, with the value expected to increase to $ 10.5 trillion over the next four years. Speed ââhas become the name of the game, as Federal Reserve research found that three-quarters of companies said they offer faster payments is essential.
This growing demand for fast digital payments has become a key factor in business decisions when selecting banking partners. Two-thirds of the companies surveyed said instant payments would play a critical role in any future decisions about choosing a banking partner. The same amount indicated that the ability to speed up payments would be a key motivator to switch banking partners. These factors make providing faster payments a top priority for financial institutions (FIs), as those that do not provide such services risk falling behind.
October Monitoring of disbursementsÂ® explores the latest developments in disbursement, including new digital wallet developments, the growing popularity of instant payments, and how FIs aim to make these technologies more mainstream.
Around the world of disbursements
One of the most popular digital payment methods is digital wallets. A study of employees of merchants, banks, FinTechs and payment companies found that 79% of them had increased their personal use of mobile wallets in the past year. Sixty-five percent said they took advantage of discounts and offers in their wallet to get better deals on products. The organizations themselves reported that card linking programs have also grown in popularity, with 35% of respondents saying their programs have grown by more than 100%.
This growth in digital financial options is causing clients to question the role of traditional FIs. A survey found that 40% of consumers say non-bank lenders can better meet their financial needs, and 30% of customers with no online banking experience are willing to try a digital lender for the first time. The discovery had repercussions across the banking industry, with less than 20% of banking executives feeling prepared for the future of the industry.
Businesses are also increasingly accustomed to faster payments, with a survey revealing that 90% of businesses plan to speed up their payments in the next three years. Almost 75% of microenterprises and 60% of all other businesses said cash flow issues were their number one concern in today’s economy, making implementing faster payments a top priority to alleviate these issues.
Find out more about these and other stories in the Tracker.
Fifth Third Bank on How FIs Provide Instant Payments to Business Customers
Nowadays, consumers aren’t the only ones who expect instant payments. Business customers also rely on accelerated cash flow to complete payroll, vendor payments and more. FIs that succeed in providing instant payment options are likely to gain a significant competitive advantage over their counterparts who do not.
In this month’s report, PYMNTS spoke with Bridgit chayt, Senior Vice President and Head of Wholesale Payments at Fifth Third Bank, on how it provides instant payments to corporate clients, helping them manage their capital and pass that speed on to their clients.
Focus: How Small FIs Leverage Faster Payments to Compete with their Larger Counterparts
Small banks and credit unions (CUs) are often at a competitive disadvantage in the banking industry because they lack many of the amenities offered by their bigger cousins. Customers are spoiled for choice when it comes to banking services, so implementing faster payments could go a long way in orienting customers towards smaller FIs.
In this month’s Deep Dive, PYMNTS explores how small banks can use instant payments to compete and looks at what businesses expect for their current and future banking experiences.
About the report
The Monitoring of disbursementsÂ®, a PYMNTS and Ingo money collaboration, is the go-to monthly resource for the latest trends and changes in the digital disbursement space, covering developments across government, insurance and retail industries as well as global advances in payments adoption. snapshots.