Customer Choice Is as Important to RTP as Speed

Whatever one’s feelings on seminal Swiss psychiatrist Carl Jung, you’ve got to admit the guy knew a thing (or two) about “duality” — two ideas in one that can each have different agendas.

Were he around today, say, observing how we pay for things, Jung would likely recognize what Onbe CEO Bala Janakiraman sees as emerging realizations around the various channels and speed settings different consumers and businesses apply to payments and payment types.

Janakiraman told PYMNTS that two-plus years into the digital shift, “What we see is that brands are realizing there is a duality to the payments experience.”

That’s a result of years of work on faster payments — predating the pandemic by a good five years, he said — primarily automating and simplifying choice. From our current vantage point, there’s a dawning awareness that speed goes both ways, and the definition of “fast” differs widely.

“There is a reciprocal equation when you and I, as consumers, want to get our loyalty payment, our incentive payment, our refund payment, our workforce payment,” he said. “I want to get it as quickly as possible in the method that I’m most comfortable with as a recipient.”

And here comes the duality: It isn’t enough to deliver a great experience to recipients — it’s equally imperative to make the process as easy and flexible for the company sending the payments.

“That’s where we see the duality is becoming more and more obvious,” he said.

That might seem obvious, but with up to 40% of some payments still being made or received via paper check in the second quarter of 2022, faster payments are still a work in progress.

See also: The Expanding Payments Choice Playbook – May 2022

Modality Matters

Janakiraman used the example of moving to a new home to ground the conversation. It often requires a decent-sized pile of money, he said, between deposits, moving expenses and new furniture.

“There is a desire to have that instantly available in my mobile wallet so that I can transact wherever I go,” he said.

You might also be awaiting the incentive or rebate on a new refrigerator or washing machine bought during the pandemic remodeling boom.

“I made the spend, I’m getting a rebate, it’s going to come in six weeks after I install,” he said. “I’m OK if it comes up as a digital card into my wallet. I’m OK if it shows up as a physical card that I can put into my wallet and use it when I shop. So, depending on the context and the size of the payment, consumers are flexible in how they think about the channel and the modality.”

Modality and duality meet at the crossroads of preference, as the new tangle of channels and form factors for how payments come and go are proliferating at an unprecedented rate. Onbe comes into the picture when companies want platform access to the instant payment forms but lack the internal resources to do it on their own.

Janakiraman said that without solutions for digital disbursements in every flavor — real-time payments (RTP), peer-to-peer (P2P), same-day automated clearing house (ACH) — many brands find themselves in unfamiliar waters.

“They’ll have to figure out, ‘How do I integrate with a prepaid card provider? How do I integrate with a push to debit provider? How do I integrate with RTP? How do I integrate with ACH?’” he said. “There’ll be segments where they may even have to cut a regular old paper check. All this complexity would be left to the brand to go solve” were it not for platform solutions.

Onbe does this by “bringing in the choice and avenues through which recipients want to get paid and providing a simplified front end where clients can connect using our APIs and file processing to send payments,” Janakiraman said. “It makes it super simple for clients to focus on what they do best while offloading the risk and complexity of figuring out how does [someone] want to get paid?”

Read more: Rebates Make Consumers 75% More Likely to Purchase

Taking the Tech-Forward View

Figuring out these layers of preference involves picking the best channel in which a person wants to consume payment — and how that experience is delivered as an extension of brand.

Like everything else since the pandemic, that’s changed for Onbe and its customers.

“We’ve seen a big secular shift to digital payments across a variety of generations,” Janakiraman said, giving a sense of the complexity. “Certain generations prefer digital more than others.

“For us, as we think about whether it’s [real-time payments, peer-to-peer applications, faster automated clearing house], those all become really powerful as you look at the millennial and Gen X demographics who are more in tune with consuming payments in a digital and instant fashion.”

That breaks down further into form factor preferences and the ability to match the payment with the persona sending and/or receiving for an optimal payments experience.

He said, “If you think about the convenience of a regular card, that habit around how to receive it and how to use it is fairly enduring. People are comfortable receiving, whether it’s an incentive payment, a refund payment, or workforce payment onto a prepaid card. Then the choice really comes in how they want to receive that card.”

Here again, it branches off into channel preferences, demographics and a host of other data points that road map the payment type for the recipient and the sender. Clients’ old habits die hard — witness very-much-alive paper checks and cash. Sometimes they need a push, and automating and streamlining accounts receivable (AR) is only half the battle.

“They’re realizing that in the absence of digital tech-forward solutions, they are subjecting the recipients to old ways of receiving payments, primarily check based,” he said. “They’re waking up to the reality that for providing an excellent experience on the way out, they would have to consider more modern, more tech-forward ways of managing their disbursements operation.”