Digital payment innovations have grown over the last few years.
“The pandemic did a good job of teaching all of us that there’s many more ways to pay than just using some of the more legacy methods like cash or even debit cards,” Tom Donovan, head of principal solutions at ACI Worldwide, told PYMNTS.
The shift to new payment methods was accompanied by the increasing use of contactless systems. And that meant (and still means) going mobile, where digital wallets can be housed in phones, yes, but also wearable devices wielded at the terminal. The embrace of these new payment options, he said, has cut across all generations. Even older consumers have made the leap toward using contactless payments and digital wallets.
And now, with the increased embrace of Apple Pay and Google Pay, among others, Donovan said digital wallets can help consumers navigate the pressures of an uncertain and inflationary macro environment.
With a nod to Apple Pay, he said, Apple has been “making a lot of changes — and updates — which allow the user to much more easily track what they’re spending on each card that they have in their digital wallet.”
Doing so is a streamlined process too, said Donovan, who added that rather than having to navigate banking apps or websites, the user can “tap” on a card displayed on a device and see their entire purchase history. That broad range of functionality is likely to cement loyalty to a given virtual card and to wallet providers too.
Google Pay and Google Wallet, he added, are strong performers when it comes to peer-to-peer (P2P) money transfers, as Venmo and PayPal have been, as well.
Digital wallets, he said, can act as a strong “bridge” between businesses and consumers through the use of bill pay and bill presentment features. Providers, ACI among them (through its ACI Walletron offering), are the proverbial middlemen as enterprises send push notifications and users view their bills — and then tap through to make their payments to lenders, utilities and insurance firms.
The conversation came against a backdrop in which a study by PYMNTS and ACI Worldwide, “Digital Bill Payments: Frequent Mobile Wallet Bill Pay Users the Most Satisfied,” showed that 60% of consumers reported they have used mobile wallets to pay bills. That’s an increase from the fall, when 49% of consumers said they’d done the same, which points to the speed and convenience of those interactions that wind up being highly valued by individuals.
“If you’re on a website and ‘teed up’ to make a purchase, if that website accepts Apple Pay or Google Pay, [the merchant] is more likely to actually convert or complete that transaction than websites that don’t,” he said.
Security remains top of mind and will become even more important as many firms and use cases get ready for faster payments when FedNow debuts next month, Donovan said. Instant payments have the potential to transform huge industries such as lending. He recounted an example in which all parties involved in a hypothetical auto loan can get instant insight into payment flows (and whether payments are being made on a timely basis), avoiding “cross communications” that might translate into a vehicle being repossessed.
“The funds would be instantly transferred and settled,” he said, without the inefficiencies of paper processes and paper bills in the mix, “letting every party know that that payment was actually made on time.”