Faster payments are on the rise worldwide and are finally taking hold in the United States, with both companies and consumers embracing more immediate ways to make and receive payments. The business benefits of faster payments include increased efficiency and cost-effectiveness along with the ability to meet consumer expectations for payments that match the speed of life.
But when it comes to disbursing funds, many companies still use slower legacy payment methods. To modernize the disbursement experience, they need to offer payment choice, including faster options, and build more engaging brand experiences. Fortunately, options abound to augment or overhaul your current payment offerings. Let’s take a look at some of the faster payment modalities available to businesses that are ready to make a change:
Same-Day ACH Payments
Same-Day ACH transfers have grown in popularity since NACHA, the governing body for the ACH network, launched the option in 2016. NACHA reported 603.8 million Same-Day ACH payments worth $943.7 billion in the first half of 2021—an increase of 73.9% and 105.1%, respectively, from the first half of 2020. Options such as Onbe’s Express ACH product, which utilizes Same-Day ACH, enable payees to transfer funds to a personal or business checking account as quickly as the same business day.
Push payments, such as Onbe’s Push-to-Debit product, enable recipients to instantly receive funds to a personal or business checking account using a linked debit card for an immediate and seamless experience. Push payments add an additional layer of security, since customers do not have to submit banking information in order to transfer funds. With over 950 million debit cards in circulation in the U.S. and 30 million in Canada, push payments have wide reach across North America and are a popular option among consumers who want instant gratification.
Virtual prepaid cards are unique among faster payment options because they don’t require recipients to have a bank account in order to access funds and use them immediately. Anyone with access to email can receive and use funds. Recipients also enjoy spend channel flexibility, with the option to use the card online, on a mobile app, or in person using a digital wallet, such as Apple Pay, Google Pay, or Samsung Pay. Juniper Research predicts that virtual cards will grow by over 360% over the next five years, reaching $6.8 trillion worldwide.
The Importance of Choice
In Onbe’s 2022 Future of Payments Survey, we found that choice was the most important factor to consumers receiving disbursements. Given the diversity of consumer payment preferences, there’s no one-size-fits-all solution for businesses that are ready to implement faster payments. The mix of payments you offer will depend on the needs of your customer base or workforce. For example, accommodating underbanked consumers by offering options such as a virtual card may be especially important in industries with highly diverse customer demographics. In other cases, modalities such as push payments may offer attractive benefits—such as enabling same-day pay in organizations that use nontraditional workforces, including gig and freelancer platforms.
When modernizing their approach to disbursements, companies have a lot to consider—cost, compliance, their current technology infrastructure, what their competitors are doing, and how best to use payments to expand their reach and future-proof their payment strategy. Partnering with a managed disbursements fintech such as Onbe can help you identify the mix of faster payment form factors that makes the most sense for your organization and your recipients. Want to learn more about building a faster disbursement strategy that’s tailored to your needs and goals? Drop a line to our team of faster payment experts.