Languid hot holiday day? Day off from work? Time to get thinking — about payments, financial services and innovation, and getting a leg up on the competition. This Independence Day, we bring you a day of independent thought, with research (or tracking of trackers, if you will) you may have missed or should revisit.
Today, of course, is the Fourth of July. And amid the banners, flags, hot dogs and fireworks … if you live in the U.S., you’ve probably got a little free time. The AC’s blowing, perhaps the beach read beckons.
Rather than take a nap, here’s a thought.
Today is also called Independence Day.
Independence – as a rule, as a concept – means not following the herd, breaking free from what has always come before and forging new paths.
And why should payments be any different? Innovation is spurred only by viewing possibilities through new lenses, by making sense of what is past and present, and imagining what might lie ahead.
Perspective is key, and we’ve got plenty of perspective for you to chew over, right alongside the BBQ and corn on the cob crowding your plate.
You may have missed a few of the Industry Trackers and Industry Indexes that are summed up below, arranged in no particular order, or perhaps you’ll want to revisit them anew. And maybe you’ll see insight flashing as bright as any sparkler you’ll see today, with the benefit of returning to the grind with new perspective.
Credit Unions: Small Communities, Big Tech
Give credit where credit is due as you celebrate the Union – or maybe just think a little differently about the credit union (see what we did there?). The credit union itself, as a business model, is seeing a bit of a technology renaissance. It’s no secret that the credit union has a community feel to it, given its relationship with local businesses and individuals, who are, after all, known as members. High satisfaction rates, to the tune of 81 percent, come in tandem with innovations such as shared branching, in which ATMs and services are universal across the network. Omnichannel and digital efforts are also on the rise, powered by artificial intelligence (AI). Who says small towns means small-mindedness? Not when it comes to financial services.
FIs, Meet AI
The emergence of high-tech and AI at the credit union level speaks volumes – and funnels right up into some larger digital banking trends. To get a sense of just how pervasive AI is becoming, as noted in our latest reports on digital banking (which spotlighted PNC’s latest efforts and adoption), consider the fact that the global market for AI and machine learning stands at a not insignificant $12 billion. In fact, it could be worth as much as $57 billion within just three years, with a tailwind provided by financial services.
Have Virtual Cards, Will Travel
For those financial services firms, intelligence is critical when moving money across borders, time zones and currencies. Facilitating international payments is no easy task, especially in the corporate realm, where the market is slated to reach about $23 trillion in 2020. The latest report offered by PYMNTS gives a deep dive into mechanics and innovation.
Perhaps apropos of the travel season (c’mon, you’re dreading the airports this weekend, too) via the Global Payments Architecture Report, Rebecca Kilby, CEO of corporate travel solutions provider AirPlus International Inc., delved into the use of virtual corporate cards to make cross-border payments reconciliation a bit less frenzied.
With more firms doing business outside of their domestic markets, explained the executive, virtual cards, among other options, can help make reconciliation simpler for employees. In other words, the corporate jet-set jettisons the paper receipt. Oh, and the latest spend management report dovetails well here, finding that 37 percent of CFOs expect to spend more on travel and entertainment in 2018, with 60 percent of business trips turning into a blend of business and leisure.
It takes money to make money, but spending money in pursuit of that mission is often a mismanaged ordeal — and that’s especially true in field-based services.
The above linked reports mark some of the bigger-picture trends afoot in payments today. Drill down a bit into subsets that explore the actual transactions, and you’ll find some intriguing information. A brief sampling, briefly rendered:
Checking out the Checkout
At the kiosk, for example, where you might have bought buns or ketchup this very morning, the Unattended Retail Report notes that the boost to top (and likely bottom) lines find a 30 percent increase in consumer spending at self-service kiosks.
Context is King
Well, to put that in context, contextual commerce is shaping up to be a game changer. The ability to get what you want, when you want it means the world to people around the world. The PYMNTS Contextual Commerce Report finds that 58 percent of consumers have engaged in that always-on, anywhere experience, which wins plaudits, as 69 percent have said they had a positive time, and 84 percent would do it again.
Getting Giggy With It
Always on, and anywhere is an apt descriptor of the gig economy, and the lures therein. PYMNTS found that, in a survey of more than 10,000 people, the gig economy skews young, and the data shows that 16 percent of workers in this space value work flexibility, with another 17 percent taking on project work to boost disposable income (perhaps this gives a boost to contextual commerce, and even late-night Amazon binges?).
When Payment Absolutely, Positively Needs to Be There Now
In order to spend, you’ve got to have the money in hand, which means getting paid on time by the businesses making those payments. The Disbursements Satisfaction Index notes that across 2,300 individuals surveyed, 75 percent stated that speed is important, and 47 percent want flexibility in where those funds are deposited. Direct deposit remains the most popular choice for nearly 54 percent of respondents, followed by instant payments at 22 percent. And no one (well, almost no one) wants to be paid by check – 96 percent of consumers say thanks, but no thanks to the way that most corporations still pay them.
Turns out there’s no real instant gratification in the world of online commerce, as the Checkout Conversion Tracker finds that it takes 23 clicks to complete an online or mobile purchase. With $236 billion in sales revenue lost amid checkout friction, retailers have their work cut out for them when it comes to getting shoppers to stay focused on their online buying missions.
Get it right, though … and there could be, ahem, fireworks.