The Rise of Push to Debit and What It Means For Your Business

In a 2019 consumer survey, Onbe found that 52% of recipients value speed the most when receiving a payment such as a settlement or contractor payment.

Who doesn’t want to be paid faster? In a 2019 consumer survey, Onbe found that 52% of recipients value speed the most when receiving a payment such as a settlement or contractor payment. As consumer demand for faster transactions increases in domains such as peer-to-peer (P2P) payments, companies need to match this speed when it comes to B2C payments, including making disbursements to their customers and workforces.

The truth is, today’s corporate payment processes are often slower than recipients would like. Cutting a check is time-consuming compared with automated, digital-first disbursement solutions. With a check payment, the recipient has to wait a couple of days to get the check in the mail—and longer for it to be deposited and clear so the funds can be spent. Businesses send a conflicting message when they have adopted faster payment methods to accept funds from consumers but use slower legacy payment methods to compensate workforces or pay out customer refunds and settlements. Creating a two-way relationship with recipients and earning their loyalty requires meeting their expectations for timelier payouts.

One payment modality helping to address this challenge is push to debit card. This option is unique in that it’s near real-time, much like making a debit payment at the point of sale. Recipients are able to receive their funds in a personal or business bank account using a linked debit card—meaning that they don’t have to share sensitive banking information. With over 950 million debit cards in circulation in the U.S. and 30 million in Canada, push to debit card has a wide reach and is proving to be a popular option across a range of disbursement use cases.

In particular, businesses that pay gig workers, freelancers, seasonal contractors, and other nontraditional workforces can benefit from offering an immediate transfer option. According to Ernst and Young, $1 trillion accrues daily in employer payroll accounts across developed countries, including the U.S. Releasing this liquidity could help address the 20% of employee turnover that is caused by financial stress—such as financial shortfalls between paychecks.

For temporary workers, turnover and financial insecurity is even higher. But the solution is clear: Onbe’s 2020 gig worker survey found that 75% of respondents would be more loyal to an employer if they received same-day pay. Offering immediate transfers empowers workers to not only access funds quickly—which is also true of other digital payment modalities, such as virtual cards—but to expand their options for using their earnings, including savings, investing, or seamless bill pay.

Other use cases also call for increased flexibility and convenience, including consumer-facing payouts. For example, disaster relief payments proved important amid the COVID-19 pandemic and provide critical aid during natural disasters. Paying by check, especially if the intended payee has relocated, often doesn’t match the urgency of recipients’ needs. Offering push to debit card solves that dilemma immediately and securely.

And the same goes for making insurance payouts, paying legal settlements, and more. Recipients nearly always need or want payments faster than companies are equipped to pay. Fortunately, the option of push to debit offers an easy way for businesses to modernize their payment processes without undue costs or complexity.

Even in today’s fast-paced world, building better experiences for customers and workforces is not just about instant gratification. It’s about understanding recipients’ lives and preferences in order to design experiences that solve problems for them. With the rise of faster payment modalities, businesses now have increasingly simple and cost-effective ways to do just that: empower their most important stakeholders with the immediate access and flexible options they’re looking for.

In addition to Push-to-Debit in U.S. dollars and Canadian dollars, Onbe's corporate disbursement platform allows businesses to disburse funds quickly and seamlessly via virtual cards, ACH (same-day), FX, and more.