Companies Are Investing In These 3 Payment Technologies
March 3, 2021
This article was published on Forbes.com in March 2021.
To improve company agility, executives are investing in leading-edge transactional technologies, such as real-time payments and contactless technology.
Forbes Insights surveyed 1,001 U.S. mid-market executives on behalf of Capital One in late 2020 to understand how business leaders are positioning their companies for the future. The survey reveals their strategies for driving greater agility, resilience and growth in their organizations.
The results were especially illuminating on the subject of technology. Fifty-eight percent of executives surveyed are investing in leading-edge transactional technologies, such as real-time payments and contactless technology.
Many retailers in 2020 rushed to create contact-free experiences that not only protected their workers, but also lent confidence to customers about their safety.
According to a joint Capital One and OnePoll survey of 2,000 people, a majority of people use their credit cards more often than cash, while 53% of respondents think contactless credit cards are a safe payment method to avoid germs, followed by using a mobile wallet feature (42%) and swiping their credit card (42%).
The prevalence of contactless payments began long before safety concerns related to the coronavirus arose. And in the future, nearly half (49%) of the surveyed executives investing in transactional technology plan to expand contactless transactions through the use of kiosks and other touch-free tech devices.
Expanding Mobile And Digital
The ultimate no-touch experience, of course, involves going entirely digital. And going entirely digital is what many consumers have done during the pandemic: Witness the growth in global e-commerce during the Covid-19 period: up to 10 percentage points across most product categories, according to a survey by the United Nations Conference on Trade and Development.
When asked to identify which transactional technologies they planned to implement, just one third of executives (32%) selected e-commerce. On the surface, this might suggest a post-pandemic move away from web-, mobile- and app-based retail and back to the in-store experience. But this datum doesn’t tell the whole story.
A deeper dive into the results reveals a schism: Executives at larger companies (those with at least $500 million in revenue for the most recent fiscal year) are significantly more interested in expanding their e-commerce efforts than are their peers at smaller companies (those with $100 million to $500 million in revenue): 40% vs 29%.
As businesses increase their focus on mobile and digital experiences, it’s important to consider the full customer journey—both in-person and online.
“Before the pandemic, you had physical point-of-sale payments and online shopping—now the two are blending together,” says Paul Moreton, managing vice president for e-commerce at Capital One. “You might order ahead and pay online, then pick up in-store. Or you might shop in-store, and have things delivered to your house.”
While consumer preferences may vary, it’s important to ensure that the entire experience is seamless. Companies must remove barriers and pain points throughout the process.
Pursuing Real-Time Payments
Implementing real-time payments is a key opportunity for business leaders to improve their decision making. In fact, nearly three-quarters (72%) of executives focused on transactional technology indicated that they were pursuing real-time payments technology.
For startups and other young companies, enabling real-time payments (RTP) is relatively simple. They face no shortage of third-party tools or plug-ins of the sort that make the transition to RTP a turnkey process.
However, in a legacy organization, the switch to RTP may be more complex and iterative, touching numerous departments, from settlement to compliance to taxation.
Perhaps that’s why 47% of surveyed executives also indicated they’re removing silos between the back office and the front office. Reducing organizational friction is a critical step toward implementing immediate transactions of this kind.
No-touch, no-cash transactions were already widely adopted before the pandemic. Then came Covid-19, adding a new element of urgency to investing in up-to-the-minute transaction tech.
“Five years ago, the focus was on creating a beautiful mobile app you could navigate easily. Now the focus is on bringing the experience to you—personalized for you—in the moments that matter most,” says Ron Secrist, managing vice president of digital customer experience at Capital One.
As the survey showed, mid-market executives are taking a strategically nuanced approach to these key investments. In doing so, they’re strengthening the organizational agility that’s so crucial to thriving in volatile times.
The information contained herein is shared for educational purposes only and it does not provide a comprehensive list of all financial operations considerations or best practices. This information does not represent any commitment, financial obligation, advice, opinion, guidance or recommendation, whether formal or informal, of Capital One, National Association, or any of its officers, directors, employees, advisors, attorneys, consultants, affiliates or subsidiaries (collectively, “Capital One”). Nothing contained herein shall give rise to, or be construed to give rise to, any obligations or liability whatsoever on the part of Capital One.