People want to get paid and they want to get paid faster
The days of the pay cheque may be coming to an end as many US consumers prefer fasting methods. What are they looking for and are they getting it? Patrick Brusnahan reports
Nearly two in five (39%) Americans would prefer to do business with a company that offers direct deposit they’d receive in a few days. This increases to 47% if the direct deposit is available in minutes.
This is according to South Dakota-based savings bank MetaBank. It asked more than 1,200 US adults on customer demands for payment.
“Consumers are demanding seamless, faster payments across the board. Companies would be well served by offering this innovation to their customers,” says Sheree Thornsberry, Meta EVP and Head of Payments.
“Faster payments meet consumer demand while providing the opportunity for business growth. It can be a cost effective addition, too, as many consumers would be willing to pay a small fee to receive faster payments.”
While it is clear that faster payments are more of a requirement now, businesses are not expected to pick up all the slack. Almost a quarter (24%) of Americans said they were willing to pay a small fee to receive rebates, refunds or credits within minutes of providing card information.
Preferred way to receive payment
None of these
Options for payment
Digital solutions are now increasingly considered for payments from businesses. MetaBank’s study, Faster Payments: What Consumers Want from Businesses in 2019, shows how mainstream the options are.
24% of Americans selected a digital, peer-to-peer option as a preference to receive funds from a business. 17% preferred PayPal, 4% preferred Zelle, and 3% had an affinity for Venmo.
While this is an improvement for the digital offering, there is still a long way to go.
Curtis Webb, Vice President, Emerging Payments – Product Management at Meta Financial Group and MetaBank, believes that work needs to be done to help these services.
Speaking to Verdict Payments, he says: “It’s important to note that only 27% of consumers have received funds from a business via PayPal; 7% via Zelle and 6% via Venmo. This indicates to us that the availability of digital faster payment methods from businesses would need to increase for more consumers to adopt them.
“Around one-third (31%) of respondents said they would be less willing to do business with a company that makes payments via cheque.”
“However, our research proved that consumers are demanding seamless, faster payments across the board. With these findings in mind, businesses would be wise to make these payment options available to their customers.”
Convenience is a major factor in this as 36% of Americans chose their preference due to this factor. A further 18% selected their preferred method because it was quicker.
This is all bad news for the cheque. Around one-third (31%) of respondents said they would be less willing to do business with a company that makes payments via cheque.
Webb adds: “Our research confirmed not everyone is on board with faster payments just yet. Some still prefer the paper cheque, including 20% who prefer to receive business-to-consumer disbursements via paper cheque, 60% of which are 55 years of age or older. Half of this 55+ group prefers cheques because they aren’t required to share bank account information.”
He concludes: “We were most surprised to find out the business opportunity associated with adopting faster payments — our study proved that faster payments can have a direct impact on customer retention and loyalty. Nearly half of consumers would be more willing to do business with a company again that provided payments within minutes. In the insurance industry, a mighty 13% of consumers would be willing to entirely switch insurance providers to one who paid approved claims within minutes.”