As we come to the close of the second calendar year that has included the pandemic, we’re also well into a digital transformation accelerated by lockdowns, social distancing and working from home.
Middle-market companies had already started deploying digital payments, and the pandemic sharply accelerated the trend. Here are five ways PYMNTS found that companies have mitigated problems and found new efficiencies through new payment options.
#1: Alleviating Consumers’ Concerns at Physical Stores
Brick-and-mortar stores have been hit hard by the pandemic and have made serious adjustments to stay in business. Still, workers and customers have both become wary of using cash and physical cards to make purchases, as many are concerned that the virus can linger on physical surfaces. Shoppers also want to get in and out of stores as quickly as possible. These concerns are fueling the rapid rise of touchless transaction technologies that had already been steadily gaining ground. For example, contactless cards and mobile wallets enable customers to wave cards, smartphones or wearable devices over point-of-sale (POS) terminals to pay.
Get the report: Small and Medium Business Reopening Report
#2. Reducing Frictions in B2B Payment Processes
Offering instant payments methods such as account-to-account (A2A) transfers, which move funds directly from one bank account to another, could alleviate some of the frictions inherent in historically manual B2B payment processes, such as needing to wait for check deposits to clear. Businesses also must be sure they can transfer the attached payment and client data just as swiftly as they can the actual funds for A2A or other instant payment methods to work as intended. Transparent payments are quickly becoming table stakes for companies to stay competitive. Businesses are shifting their invoicing tools to virtual methods and are relying on online databases and workflow platforms to support faster payments and more satisfactory relationships with their clients. Integrating embedded or A2A payments within enterprise resource planning systems should be a top priority for companies.
Get the report: Next-Gen Digital Payments
#3. Disbursing Funds More Efficiently
Customers that have paid their insurance premiums on time for months or years on end understandably want to be certain that any necessary claim payouts will arrive swiftly and conveniently when crises hit. This makes it important for insurance companies to deliver swift, convenient claim payouts that are both cost-effective to issue and conducive to customer retention. Digital tools can help insurers disburse funds in more efficient, budget-friendly ways, while also pleasing policyholders. Insurers looking to reduce costs and improve efficiencies could consider moving claim payouts away from paper checks in favor of digital disbursement methods. Moves to instant disbursements are likely to be well-received by customers of companies in any industry that distributes disbursements.
Get the report: Digitizing B2B Payments
#4: Supporting Payments Choices on a Global Scale
As online shopping continues to take the world by storm, a growing number of global consumers strongly prefer alternative payment methods — including mobile payments, digital wallets, bank transfers and buy now, pay later (BNPL) plans — to traditional card-based solutions. More than 450 local payment methods are used around the world, and merchants quickly have realized that simply offering debit or credit card payment options at checkout is no longer enough to satisfy customers. U.S. merchants looking to grow globally must offer methods popular in each country. So, cross-border eCommerce’s rapid rise is fast-tracking the development of cross-border payments solutions. Some mobile wallets, for example, allow consumers to process transactions in a variety of currencies and to place orders to and from different regions.
Get the report: Cross-Border Retail Payments
#5. Controlling Corporate Spend
Corporations are finding virtual credit cards to be a welcome partner in reducing wasteful spending. By 2026, virtual cards are expected to be the digital payment tool of choice, as virtual card-based expenses will reach $6.8 trillion, up from $1.9 trillion this year. By generating a unique digital token linked to a card’s account, users no longer need to carry a physical card, increasing convenience and security while maintaining oversight of spending. This is especially important at a time when, with employees working remotely, it has become much more challenging to manage expense authorizations and keep corporate credit card accounts safe from outside threats.
Get the report: Corporate Spend Playbook