Retailers’ efforts to meet consumers’ instant gratification can get a boost from the pay-by-bank online bank transfer.
“We live in a world today where everyone wants everything now,” Neil Erlick, chief corporate development officer of Nuvei, told PYMNTS in an interview, noting the emergence of online bank transfers within a broad and growing spectrum of rapid payment options.
That rise, he said, is the result of their immediacy and the fact that they allow consumers to use their bank accounts in ways they haven’t been able to before.
To that end, he said, if a consumer — through the “old” or “traditional” methods — had wanted to make an online purchase, they would use an online check or automated clearing house (ACH) rails.
But then they’d have to find checking account and routing numbers in their checkbooks.
“Half of the people buying things online don’t have a checkbook or couldn’t tell you where it is — or where to find their routing numbers,” said Erlick.
With a nod to the ease of use of online bank transfers, he said the payment method allows consumers to use their usernames and passwords from the bank with which they do business every day to transfer funds to make a purchase.
“And all of this can be done instantly,” he said.
As real-time and instant payments gain ground, the online bank transfer fits neatly within that pantheon. Interest in the new option is growing, as PYMNTS and Nuvei have found that two-thirds of U.S. consumers who are interested in trying new payment methods are very or extremely interested in using online bank transfers.
But there’s still a bit of hesitation in the mix. Merchant acceptance must increase — and Nuvei offers online bank transfer functionality on a B2B basis, advising on where to place the online transfer optionality (at the cashier or on the checkout page).
“We’re invisible to the consumer,” Erlick said, but efforts to boost merchant acceptance among those businesses and educate them continue apace.
Erlick noted that one path to greater acceptance comes from the fact that Nuvei was the first in North America to launch real-time payments in tandem with an exclusive relationship with Plaid (first within the gaming industry and extending to other verticals). In addition, online marketplaces prove fertile ground for online bank transfers. Merchants want to get paid immediately and redeploy capital as soon as possible.
Consumer Acceptance
As to consumer acceptance: Elsewhere, data from PYMNTS and Nuvei showed that four out of 10 consumers avoid online bank transfers due to security concerns.
For the moment, at least, said Erlick, consumers are going to be skeptical of things they have not tried yet.
That reticence to embrace online bank transfers may depend on the vertical, geography, demographics — and whether loyalty and rewards programs are in the mix.
“But the numbers, for us, don’t lie,” said Erlick. “We’ve seen tremendous growth and a tremendous number of people starting to use this technology — and like anything else, the numbers will increase over time.”
Looking ahead, younger consumers, not surprisingly, will continue to be early adopters and enthusiasts about online bank transfers. And as instant payments become more fully embedded into the fabric of everyday life, interest will grow.
“If you look at real-time payments and the FedNow initiative,” said Erlick, “the bottom line is consumers want to pay instantly, and they want to get paid instantly.”