Twenty-first century consumers are accustomed to getting the things they want quickly and easily. Consumers expect to receive funds instantly, especially in business-to-consumer (B2C) transactions. This desire creates an opportunity for businesses looking to retain and attract customers and increase their market share. A recent Payments Journal article, pulling data from our Faster Payments: What Consumers Want from Businesses in 2019 study, examined the business sense of prioritizing digital payments for B2C transactions. Below are two key takeaways from the piece.
1. People choose – and stay with- companies that pay faster. Faster payments have a direct impact on customer loyalty and retention, particularly in industries that frequently make B2C payments like insurance and tax. Our survey shows that consumers are more likely to stay with an insurance provider that pays approved claims in minutes rather than days. Similar trends are evident in the tax industry, with consumers preferring to use businesses that offer direct deposit instead of checks.
2. Customers are willing to pay for it. Businesses may hesitate to switch to digital payments because of the perceived costs, but our research shows that faster payment programs more than pay for themselves. First of all,1 in 4 consumers indicate they’d be willing to pay a small fee to receive payments- such as rebates, refunds or credits- within a few minutes. Secondly, minimizing the use of paper checks saves businesses money (between $2.15 and $3.15 per paper check, according to Nacha, the organization overseeing the ACH network).
Whether companies seek to meet the demands of today’s customer or cut overhead costs associated with traditional paper check disbursements, faster payments present a unique opportunity for businesses looking to grow.
Read the full Payments Journal article here.