For Faster Payments, Is The Business Model Key?

In payments, there are revolutions marked by sweeping changes that happen in very short periods of time — online shopping, anyone? For payment platforms, the conduits that keep commerce’s wheels greased are similarly transformed by change, with constant evolution in the cards.

In a recent interview with PYMNTS, Tammi Shapiro, vice president of product strategy and management at financial services provider Fiserv, laid out some of the ways in which existing payment platforms are being extended to allow businesses to accept digital payments.

Existing payment platforms often offer tried and true benefits in terms of reliability, efficiency, scalability and security. Making these platforms available — via software development kits (SDKs), application programming interfaces (APIs) for Java and other languages — opens new possibilities for businesses to tap into these benefits, all while delivering customers payment experiences tailored to their needs.

Businesses using SDKs are able to work with pre-built or buildable options for payments infrastructure, deciding “whether they want to invest more and create their own [payments and security] experience.” The SDK/API approach focuses on seamlessly integrating the payment experience into a business’ broader user experience.

The model works to boost traditional companies’ digital presence, explained Shapiro, with an eye on authentication. This helps address concerns about security, as firms conduct identity verification and determine if the account an individual is using to fund transactions is legitimate.

Additionally, she noted, firms can adopt a “widget or flexible approach” and can start with a pre-built option before embracing buildable customization. Certain parts of the payments process itself can be streamlined with pre-built functionality, such as authentication.

Such flexibility “brings value to any business in any type of industry,” Shapiro said, especially for firms working to foster greater acceptance of same-day ACH payments, “with the ability to support a business as it scales.”

Shapiro told PYMNTS that payments innovation can boost the operating efficiencies of companies of all types, emphasizing traditional verticals such as property management and education. Firms in those industries can look to faster ACH payment options as a cost-effective and customer-satisfying alternative to check-based payments.

The costs of remaining tied to paper-based processes should be weighed against what Shapiro termed the time and “effort it takes to integrate different payment options and the ongoing maintenance” that results from adopting those options — spanning both ACH and digital payments accepted via credit and debit cards. Cards may prove the preferred way to transact for some, and for others, there may be a nod toward paying from demand deposit (DDA) bank accounts.

ACH or eCheck holds allure for more traditional companies, as the nature of some payments — utilities and rent, for example — are recurring. With recurring payments, there are several benefits to using ACH. The conduit is economical for companies, especially for higher dollar payments, and helps firms cement relationships with their consumers.

The movement toward faster payments across ACH — credit and debit — involves “a benefit on both sides,” Shapiro said, as firms know payments are “money good” and consumers know the payment has successfully been processed. Same-day ACH payments, she added, offer a strong, digital alternative to paper checks, marked by speed and an assurance that funds get where they need to go. Studies have found more than half of consumers would feel comfortable supplying account information and would utilize ACH payments across everything from paying their medical expenses to receiving government benefits, according to Shapiro.

“People want better budgeting [tools],” when it comes to expenses, she added. The lure of ACH payments is customers “want to know just how much is left in their accounts.”

Join PYMNTS.com and Fiserv for a webinar on Wednesday, Nov. 8, 2017, to learn more about how businesses handle payments changes when they venture into the digital environment. Check back soon on PYMNTS.com to register.