“If we look back over the past few years, we are nearing a turning point for banks and fintechs to work together to make instant digital payments ubiquitous,” said Drew Edwards, CEO of Ingo Money. “My wish for America and the world in 2021 is that banks and FinTechs like Ingo Money will work together to accelerate the modernization of payments for the future. For more information on Edwards’ comment, see” A Look Forward: What Executives wish America and the world in 2021. “
As I write this, it was reported that the first COVID-19 vaccine has just been administered in the United States. While the rapid development and impending rollout are a very hopeful step towards the end of this pandemic, the vaccine alone will not be enough. The economic ramifications and resulting financial challenges faced by many Americans remain grave and need to be addressed. From a payments perspective and how our industry could help, my wish for America and the world in 2021 is that banks and FinTechs like Ingo Money work together to advance payment modernization for the future.
By creating a digital payout experience with recipient selection, consumers and small businesses can be transferred to an account of their choice faster and often instantly, giving them better access and control over their cash flows. If we look back over the past few years, we are nearing a tipping point where banks and fintechs work together to make instant digital payments ubiquitous.
The idea of faster payments caught on in 2019 when gig economy platforms Uber and Lyft introduced the option to be paid when needed. Adoption went through the roof, as many paycheck-to-paycheck drivers as many Americans pointed to the benefits of lower financial burdens and the ability to pay their bills on time. FinTechs began working directly with early adopters in the credit and insurance industries to provide instant payment options that could save them money, differentiate their offerings, and drive customer loyalty.
Then in 2020 the coronavirus struck. The physical stores were closed, the handling of cash became undesirable, and we saw a massive shift towards the use of digital in shopping, paying and communicating. The CARES bill resulted in a $ 2.2 trillion relief, but not without major challenges. Examples include improper payments, fraud, and tens of millions of people waiting weeks for checks to arrive. This was a key point in determining how outdated the government’s payout infrastructure had become – and how modernized it needed to be. All of these events indicate that there is a demand here for a modern, digital withdrawal experience.
Both government agencies and companies are asking their treasury banks for solutions. The turning point is that we are now seeing an accelerated openness to cooperation between banks and FinTechs by leveraging banks’ expertise in treasury banking and FinTech’s experience with innovations. The belief is that each party can help solve the other’s problems and together they can better solve their customers’ withdrawal problems. We have already entered into several large banking partnerships and can already see the impact as two of the largest insurance companies in the country have switched their business to these treasury banks for access to a real payoff modernization.
My wish and even a forecast for 2021 will be that this year more treasury banks will enter into partnerships with FinTechs and offer their customers modern payout solutions that include an ubiquitous selection of recipients. As the world shrinks with digital experiences that connect us all, it is clear that a widely available modern payout experience is accelerating with the interoperability of large treasury banks, and that these banks are realizing that partnering with FinTechs is a 1 + 1 = 3 equation. Together we can enable instant digital payments to hundreds of millions of people around the world who want and need faster and more convenient access to their money.
NEW PYMNTS DATA: PARADIGM SHIFT STUDY FOR RETAIL BANKING SERVICES – JANUARY 2021
Over: Retail Banking Services’ January 2021 Paradigm Shift Report, PYMNTS, examines how consumers are choosing to get in touch with their financial institutions when accessing information about various products and services, especially since the pandemic began.