Category Archives: Alacriti Blog

Alacriti Blog

2021 Year in Review: Real-Time Payments, Crypto and BNPL

*Originally published on CUInsight.com

The billing and payments landscape continues to undergo rapid change. Over the course of 2021, our blog strived to keep clients updated on the latest industry developments and offer our views on future trends. As we close another unconventional year, we’ll revisit a couple of developments we touched on earlier in the year, including real-time payments (RTP) and Buy Now, Pay Later (BNPL), as well as provide a look ahead at cryptocurrency and how its increased adoption may impact the billing ecosystem.

  1. Real-Time Payments and Request for Payment Availability Continues to Expand

We’ve all been following developments in payments modernization—headlined by increased adoption of real-time payments (RTP) by both financial institutions and businesses—as well as it’s spin-off Request for Payment (RfP).

While RTP availability has steadily increased since its rollout by The Clearing House (TCH) in 2017, the global pandemic has heightened calls for payments modernization headlined by RTP and faster payments. The burgeoning gig economy has also presented a favorable environment in which to grow RTP.

According to a recent report, “the RTP network’s real-time payment capabilities are accessible to financial institutions that hold 73 percent of U.S. demand deposit accounts (DDAs), and the network currently reaches 60 percent of U.S. DDAs.”

Meanwhile, the Federal Reserve is still forging ahead with its own real-time payments service, FedNowSM, set to launch in 2023.

As a natural complement to RTP, TCH’s Request for Payment (RfP), is also gaining in popularity as businesses realize the benefits of pushing requests for payments to be delivered in real-time, including higher straight-through processing levels, guaranteed “good funds,” simpler reconciliation, faster time to payment and reduced operational costs.

  1. Buy Now, Pay Later (BNPL) Continues to Gather Steam

Buy Now, Pay Later (BNPL) is a fairly recent and increasingly popular payment option among consumers exhibiting pent-up purchase demand. BNPL gives purchasers the option to pay for their purchases in multiple, interest-free installments. Essentially, it’s a new and improved instant credit option. 

Instant store credit options of the past also often offered interest-free purchasing for a set period of time, but missed or late payments or failing to pay off a purchase within the interest-free period triggered sometimes astronomical interest rates (and sometimes back-interest). BNPL offers all the rewards of interest-free purchasing without the cloud of high-interest and penalties hanging over consumers’ heads. 

The benefits to consumers are obvious, but what about the benefits to businesses offering BNPL? Mainly, a BNPL option can be the deciding factor in a consumer’s ultimate decision to buy and can take the sting out of sticker shock associated with higher-priced items. But regardless of the size of the purchase, BNPL can offer businesses a competitive edge to gain more market share in these uncertain and uncharted economic times. And financial institutions can leverage BNPL as a competitive differentiator by partnering with BNPL vendors to offer BNPL payment options of choice to consumers linked directly to their DDA accounts. 

  1. Crypto Achieves Sharp Adoption Curve

We discussed cryptocurrency briefly mid-year, but it’s worth taking another look as its adoption is steadily increasing. With the global pandemic exacerbating an already rapidly accelerating drive toward digital-everything, increasing interest by average Americans into crypto is the next natural extension. 

One recent study found that “48 percent of investors in the country bought such alternative currencies in the first half of 2021. Younger consumers especially are growing increasingly intrigued by digital currencies. The report found 37 percent of investors 18 to 44 years old who have not yet bought digital currencies are either “very” or “somewhat” interested in doing so.”

What might this mean for merchants and billers? It means that as interest and investment in crypto increases, merchants and other billers will need to consider accepting crypto forms of payment—and payment processors will need to consider building infrastructure to support such payments—in order to gain or retain a competitive edge. 

Crypto is in its infancy as an emerging payment type and its volatility calls into question its mass appeal, but merchants, financial institutions and other businesses should watch trends around crypto closely to be future-ready.

Now that you’ve reviewed trends from 2021, watch the webinar, Top Payment Trends to Watch in 2022. 

Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without the burden of significant infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or info@alacriti.com.

Alacriti Blog

Looking Back at AFP 2021

After what felt like an eternity without business travel, the last few months have seen the beginning of a return to normalcy (or at least a normal with social distancing and better hygiene practices than we saw in the pre-pandemic world). Normal for us is setting up booths and seeing our customers and prospective customers out in the market at conferences, shows, and seminars discussing and sharing insights on the payments market. To steal a cliché, we didn’t know what we had until we lost it, and getting back to a face-to-face in person reality was for me at least, the biggest piece of the normalcy puzzle we have been missing. Getting to see friendly faces in Washington D.C. at the first AFP conference in this new era, was a welcome return to convention. The show itself didn’t disappoint from the acceleration of real-time payments, to the market’s “new oil” data, they hit the right high notes, and gave us a few key takeaways. 

Takeaway Number 1: The business payments market is HOT right now. This is sort of a cross over trend from Money20/20 but the business payments market is starting to heat up, and is getting faster… one could say, it’s going real-time. As a certified payments nerd, I tend to get really excited about small changes, which usually takes YEARS to actually take hold in the market. When we first started talking about real-time payments almost a decade ago, the point that often went unsaid is that the environment and systems that were built around the payments in the business market are going to change slowly, way slower than the consumer market (which went bonkers for real-time with Venmo and Zelle in the P2P market about 5 years ago). However, I am here to report, the time is officially here for real-time payments in the business space. The AFP conference had session after session covering all aspects of faster payments. FinTech has turned its focus on this space, and banks have accelerated their roadmaps, and 2022 is going to be THE YEAR for real-time business payments. 

Takeaway Number 2: Usage of Data. With faster payments, comes better data. When you move from systems that were cutting edge when the original Star Wars premiered, to systems that were born in the age of supercomputers, needless to say, there’s going to be A LOT more information coming along with the payment. As an industry, we did a really good job in building work-arounds to this problem with ERP solutions and EDI files to go with PDFs sent via email. However, with the new payment rails, data capabilities you could only dream of 10 years ago and the ability to apply that data is now at our fingertips: cash flow forecasting, working capital management tools, eInvoicing and simple reconciliation processes are all areas where the new data capabilities will pay dividends. 

Takeaway Number 3: Collaboration and Partnerships. I have been somewhat in awe of this trend, but it was on full display last week in Washington D.C.. The question of FinTech, friend or foe, has shifted into “Big Tech, Friend or Foe” and has cleared the way for the clean answer to the first which is a resounding FRIEND. Bank and FinTech partnerships, as well as FinTech and FinTech partnerships, were front and center (at least in the exhibit hall and in the press). The rapidly expanding market, and the speed of change in the market, has created an environment where partnerships will dominate the next evolution of payments. As we moved from on prem, to data center, to cloud deployment models— the technology underpinning the engines and services also changed from proprietary code, to standardized messaging, to open APIs. We went from an extremely difficult partnership environment to one where partnerships can flourish! From solving individual niche use cases, to connecting banks to central payments infrastructure, every aspect of the payment flow is now ripe for partnership(s). Nothing is off the table (and it shouldn’t be)!

Bonus Takeaway: 2022 is going to be the year of in-person events. We got a small taste of this over the past few months, with two major shows returning to their normal calendar positions. Next year, it all indicates that we are going for more in-person events. I for one won’t miss the Zoom cocktail hours of 2020 and 2021. Nothing can replace a good meetup amongst friends and colleagues, and we can’t wait to share one with you all in 2022! 

 Read about Money20/20 in Looking Back at Money20/20. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

How to Choose an EBPP Solution: Three Factors to Consider

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Electronic bill presentment and payment (EBPP) solutions are a strategic investment for consumer-facing businesses including healthcare providers, insurance carriers, utility companies, and more. As consumers continue to move toward digital transactions as demand for contactless technology increases, a multi-channel bill payments solution can give businesses the edge they need to stay ahead of the competition.

EBPP results in reduced billing costs, enhanced security and decreased time to receive payments for businesses. The bill payments experience can have a significant impact on overall customer satisfaction, so businesses should be sure to research and choose an EBPP solution that best meets their unique needs. Here are three important factors to consider when selecting an EBPP solution.

Innovation

Payments are faster and more convenient than ever thanks to innovative technology like P2P payments, digital wallets, mobile connectivity, and more. And consumers are looking for the same speed and convenience for their bill payments. An EBPP solution should be able to accept bill payments via innovative channels like Pay by Text, intelligent personal assistants, and messaging apps. It should also combine these payments seamlessly with more traditional channels (agent, IVR, kiosk, etc.) to provide a top-down view of an organization’s entire payments program.

Customer Experience

Bill payments are often the most frequent touchpoint between billers and their customers, which is why it’s so important to deliver the right experience. Now more than ever, customers expect the process to be smooth no matter how or when they choose to pay a bill. It should be easy for customers to connect with businesses and pay their bills anytime and anywhere, using the payment channels, methods, and types they prefer.

In addition, an EBPP solution should give customers access to timely support in case they encounter any roadblocks throughout the bill payment process. Potential complexities should be mitigated by design that offers a clean and efficient interface that’s intuitive for users. A simple, easy-to-use UI combined with features like messaging and alerts can transform the bill payment process into a powerful way to engage with customers.

Flexibility

A great EBPP solution is flexible and fully customizable, from its visual design to its features and functionality. Businesses should seek a configurable EBPP solution that can accommodate unique organizational needs. An EBPP solution can be tailored to specific business requirements and combined with custom design to deliver a frictionless experience that allows businesses to cater to the needs of all customers no matter their individual preferences.

The Bottom Line: Bill payments are such a critical component of the overall customer experience that businesses can no longer afford to deliver anything less than truly exceptional. Partnering with an EBPP provider that’s rooted in innovation, customer experience, and flexibility can transform the bill payment process for both businesses and their customers.

Read more about bill payments in Why Should Businesses Offer Flexible Payment Options?

*This is an update on an original post published October 2019

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

A Look at P2P Payments

Awareness and adoption of digital payments are at an all-time high. Mobile phones, connected devices, and other emerging technology all contribute to increased consumer demand for speed, efficiency, and convenience. Person-to-person (P2P) payments are becoming more popular as consumers switch from physical payment methods like cash and credit/debit cards to digital alternatives, especially in the post-pandemic economy.

P2P payments were first made popular by payments giant PayPal, which made it possible to transfer money to other PayPal users via the web or mobile devices. The market soon expanded to include similar services from Google, Dwolla, and others, but PayPal continued to dominate the space. Now, Venmo and Zelle® are among the most popular brand names in the world of P2P payments. Here’s a closer look at both solutions.

Venmo

Launched in 2009, Venmo quickly captured attention by offering users the option to send and receive money via bank accounts, debit cards, and prepaid cards without incurring a fee. Since its introduction, Venmo’s mobile-centric approach and social component have made it a front-runner in the P2P payments space.

Venmo was acquired by payment service provider Braintree Payments in 2012 before PayPal absorbed the parent company in 2013. Venmo has 361 million active accounts and is on-track to generate $900 million in revenue in 2021.

Zelle

The success of P2P payments platforms like Venmo spurred innovation from the banking sector as well. Individual banks long offered their customers the ability to send and receive money to and from other customers; however, due to lack of centralization, none of these services were formidable competitors for solutions like PayPal.

A bank-owned consortium, Early Warning®, launched its own P2P payments solution in 2017 named Zelle. It uses alias-based authentication of account holders via email addresses and mobile phone numbers to connect users and facilitate near-instantaneous money movement without fees. As of Q2 2021,1700 financial institutions are signed on with Zelle, representing 74 percent of all U.S. DDA accounts and $120 billion worth of payments sent over its network. 

What’s Next for P2P?

In an age when people might be more likely to carry a smartphone than cash and cards, P2P payments are a viable digital alternative to traditional payment methods—and demand only continues to increase as consumers demand more contactless options. These solutions make it easy for consumers to split a restaurant check, pay a friend back for a concert ticket, or send a monetary gift. But P2P solutions are expanding beyond person-to-person payments. Zelle offers a disbursements solution as well as a solution for small businesses. And Venmo is expanding its reach into merchant acceptance and diversifying with its branded debit card. The next phase of P2P may see these solutions emerging as holistic payment solutions that can benefit both consumers and businesses.

Read more about P2P in P2P Money Movement—The Retrospective You Didn’t Know You Needed.

*This is an update on an original post published October 2019

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

5 Request for Pay (RfP) Use Cases for Billers

Real-time payments is a critical part of payments modernization. Request for Pay (RfP), is financial messaging scheme built on the rails of real-time payments, that enables billers to initiate real-time payments from bill payees with the click of a button. The request includes all relevant invoicing information, and the payee can pay immediately or at a scheduled time, giving them more control over when the funds are taken from their account. It’s a win-win—the biller benefits from irrevocable, good funds, and the payee gets more visibility and control over when the bill is paid. Here are five use cases for billers that are accelerating the adoption of RfP.

  1. “Risky Payments” or Pre-Collection/End of Service Payments – I am not talking about “Risky” in the Tom Cruise sliding across the floor kind of way, but risky in the sense of a WEB Debit ACH payment bouncing back on the biller for NSF or other reasons. The good funds model that RTP operates on means that the payment will only occur if the funds are in the account. This takes away the possibility of incurring a high fee for attempting to withdraw funds that may not be there. It also gives the bill payee the ability to pay the bill WHEN funds are in the account versus having to try to time the ACH delay. Also, the funds are irrevocable once transferred so billers get certainty of funds, which can allow them to continue to continue their services, or deliver goods to the payee.

  1. Payment Option for the “Just in time Bill Payer” – I will admit, I fall into this category from time to time (or all the time). I seldom pay bills before they are due, and try my best to keep my funds in my bank account for as long as possible, and I know I am not alone. With RfP, billers can provide me the ability to wait until the last second to pay, and receive those funds IMMEDIATELY. In today’s bill payment space, there can be anywhere from 1 to 3 days where my biller really doesn’t know: if I sent a check, paid via ACH from my online bank or from their bill payment site, or whether funds are actually in my account to pay the debit (which brings us back up to the first use case). RfP gives billers another option to help their clients pay, how they want to pay with when they want to pay.

  1. One-Off Bills/Invoices – For high value payments, the RfP rails gives billers the ability to send a one off bill or invoice to their consumer and business customers that can help accelerate their accounts receivable cycle. The message is delivered securely through the RTP network, directly to the payees bank account, where they can simply accept the charges and initiate the payment. By combining the eInvoice/Bill information to be sent on the payment network, the payee has everything in one place—no need to chase down the invoice PDF in an email, or try and locate a paper bill to manually enter details on a payment screen at the biller’s site or on their own consumer or business banking account. This use case will continue to grow in importance as the network’s limits continue to rise!

  1. Conversion of Non-auto/Recurring ACH payers – This use case is similar to our second use case, however I don’t necessarily think this group at their core are procrastinators—they just like to be in full control. For many, setting up bill payment for recurring or auto-pay is so they never have to think about the bill. I can raise my hand for plenty of those types of payments, the ones that are basically the same dollar amount every month and don’t put me at risk of an inadvertent overdraft on my checking account. However, for bills that may vary or come infrequently (maybe quarterly or bi-annually), there are plenty of payees that would prefer to validate the amount of the payment, and control when their payment leaves their hands. RfP gives these individuals the perfect tool to centralize their bills and give them even more control on when the payment leaves their account.

  1. Keeping Pace with a Changing Market – As my colleague mentioned in the Top RfP Test Cases, Use Cases, and Case Studies We’re Watching blog post, some of our markets largest banks and Billers are moving towards piloting RfP. As this new payment experience moves from niche to mass market, making sure your bank can support your ability to bill your clients and offer them the payment services they want is key. The payments market is transforming and consumer and business expectations won’t be far behind!

 

Read about some of the exciting RfP test cases that we’re watching right now in the market today in  Top RfP Test Cases, Use Cases, and Case Studies We’re Watching.

Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without the burden of significant infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or info@alacriti.com.

Alacriti Blog

Looking Back at Money20/20

It took 18 months for me to get on a plane again, get back to meeting with friends and colleagues in person, and to talk payments all day with people just as interested as I am. I had the pleasure of experiencing all of these firsts at the greatest FinTech show on Earth, Money20/20. The location for Money20/20 paralleled my feelings for finally traveling. Much like the experience of the tired travelers lost and wandering in a desert on television shows, Las Vegas is a mirage, rising out of the sand with   towering hotels and casinos. This year’s Money20/20 beckoned us FinTech geeks to meet once again, and oh boy, did we ever! From Sunday’s opening sessions, to being asked to leave the show floor on Wednesday afternoon at 2:00 p.m., we gathered and geeked out!

The show was very different this year, and in an amazingly good way. Smaller than the previous iterations for obvious reasons, the show’s design and flow made it feel both intimate and intensely alive and sprawling simultaneously. Unlike previous years, the show’s main stages were all in the exhibit hall, making it easier to drop into sessions while still keeping a full meeting schedule. The folks that came this year truly wanted to be there, and represented the “doer” class of talent in our industry. Conversations got technical, but that meant relationships and partnerships were getting deeper in every booth on the floor as well as in the appropriately named “Connections Lounge”.

After 18 months of only virtual conferences, it was great to have a full immersive experience and finally get a good pulse on what the big trends are in our industry right now. I can tell you just by looking at the sheer volume of attending companies focused on the fraud ecosystem, fraud is leading the pack on the hot industry topic list.

Trend 1 – The Fraud Ecosystem – Whether it was an AI and machine learning focused company or a company uber laser focused on risk scoring a single data field, or trying to validate a digital identity—the topic of fraud was never far. Entire rows of vendors were dedicated to the space, each looking at a different piece of the fraud puzzle. A truly successful fraud strategy requires a layered approach, and the future of the space is going to rely on the ideas and products we saw this week.

Trend 2 – Small Business Banking – Another welcomed shift in focus on the payment space was a more broad focus on the small business payment needs and B2B payments. Long the forgotten client segment sandwiched between corporate banking and retail banking, the small business space is ready to get the full transformation treatment. The FinTech focus on this was evident all week from the session topics to the vendors on the floor.

Trend 3 – Digital Currencies and Crypto – I think the shift away from being “Bitcoin” centric or focused has been welcome, generally addressing how we get better access from the traditional payments and banking space to the crypto space. While not the hot topic it was a few years ago, the more focused approach on bridging the existing gap was welcome.

Trend 4 – Partnerships –  I had called on this trend a few years ago. Maybe it was the design of this event, and the attendees themselves, but the discussions of who is working with whom seemed to be everywhere. From payments, to fraud prevention, to the aforementioned crypto space, the partnership discussions were all over. As the problems we are trying to solve become increasingly complex, this trend is going to become even more important. The saying “it takes a village” couldn’t be more true.

Trend 5 – In-Person Events are Back! – The final trend is maybe the most obvious, in-person events are back and this week didn’t disappoint. The energy was palpable all week and everyone just seemed genuinely happy to have face to face interaction. It was a welcome change to the endless Zoom/Webex/Teams meetings of the past 18 months. Now to finally see the people that are changing the financial services space and designing what that ecosystem is going to look like for the next generation of products and services. 

 For a forecast of 2022 trends, watch the webinar playback, Top Payment Trends to Watch in 2022. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

Faster Payments Use Cases – What Does the Future of B2B Payments Look Like?

When it comes to faster payment discussions, the most popular questions we hear are: 

  • What are some use cases of real-time payments?
  • How do I show an ROI on the investment required to start on a faster payments journey? 

These are great questions, and the fact that we get them in some form in every introductory meeting we have shows us that the market is rapidly gearing up to move forward on their real-time payment projects. When it comes to the questions, answering the first is what leads us to the second answer.

So, where to start with the use cases? Identify if your financial institution has any immediate client needs—taking care of low-hanging fruit and listening to your customer or member base is and always should be step one. Quite frankly, if any are pressing enough, you don’t need to read any further. Get going on your faster payments project ASAP! However, if there are no immediate needs, or a scattering of needs that seem to be all over the place I would offer the following advice.

If you are a financial institution that has both consumers and commercial clients or members, the first use cases of focus should be your business clients. This is because, for all practical purposes, business banking is driven by a fee-based mindset while consumer banking is a free-based mindset. Meaning, as you introduce new functionality or enhanced services, your business clients expect to pay for those improvements. Whereas, as an industry, we have, for better or worse, trained consumers to expect to receive services for free.

Second, businesses of all types benefit from faster access to funds, whether it’s improving their working capital management or procure to pay or order to cash processes. Access to immediate and irrevocable funds helps all aspects of B2B payments.  That’s not even going into the value of all of the data and information that can be sent along with the payment in the new payment rails. This will have a great impact on the eInvoicing and Business Bill Payment models that were built around the legacy payment infrastructures we still currently rely on.

As the adoption of faster payments continues, and more financial institutions connect to the RTP network, and additional clearing and settlement channels come online, offering real-time payments will rapidly become a necessity. Businesses will find faster money movement services from other financial institutions that are connected to these networks and realize the potential they bring to their treasury and operations teams. The subset of use cases for B2B payments is massive, and as noted, are traditionally fee-based. So, the ROI of offering these services tends to become an exercise of setting a price point per transaction (or bundled transactions into a tiered service model) and build out your volume models to show revenue, similar to other payment types. However, as noted earlier, the value of the payment rail is in more than just faster funds movement (which is great on its own). It’s also in the data that moves with the transaction, giving financial institutions the ingredients to create net new products and services, and that is where the true ROI resides.

Learn more in Why Banks and Credit Unions Need Real-Time Payments.

Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without the burden of significant infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or info@alacriti.com.

Alacriti Blog

Zoomers on Campus: Where I Choose to Bank

*Originally published on CUInsight.com

With many Zoomers in college and new to the banking industry, there is much to learn about what financial institutions can do to improve their banking experience. Financial institutions can attract more Zoomers by highlighting and discussing what they value in terms of personalized experiences, customer service, and rewards. This is critical, as Zoomers are an imminent major target audience for financial services.  Here, we provide insight into why Zoomers bank where they do, according to data and anecdotes from Zoomers themselves.

Personalized Experience

Mobile banking, better rates, and personal relationships are common factors that Zoomers are looking for when it comes to banking. 64% of Zoomers are looking for a more personalized banking experience with product and service recommendations relevant to their unique situation. Especially as new college students, it’s often the first time they are taking control of their budget. “I just opened my account earlier, and I chose my bank because I like their customer service. I have a lot of questions, so I would rather talk to someone so they can help me,” says Kayla, a freshman at the University of New Haven. 

For Zoomers, customer service is essential. Whether it be from digital chat options or over the phone, they want to be assisted fast and feel cared for. “I would switch to another bank if they offered great customer service. That to me means 24/7 representatives available that greet you, informative videos about banking or how to use mobile banking or FAQs is very helpful,” stated Lizette, a junior at Caldwell University. A study conducted by PYMNTS.com and SundaySky found that 72% of consumers would be very likely to switch to FIs that provide video content on its products. Personalized videos work because they drive engagement. This includes a higher click-through rate and interaction rate, which leads to a higher sales conversion rate.

Partnerships, Incentives, and More

Many financial institutions partner with colleges to gain competitive advantages, such as having only one bank or credit union on campus and strategizing where to place ATMs and signage in high-traffic areas. They can even set stands on campus to hold giveaways and promotions. Although it doesn’t guarantee that the student will sign-up with the bank or credit union on campus, financial institutions need to get creative with incentives and rewards programs tied to achieving Zoomers’ financial goals. A lot of college students are looking into what financial institutions have to offer to them. 

Nicole, a senior from Western Connecticut State University says, “I look for banks that offer me low-interest rates and cashback programs for getting good grades; every little bit helps during school.” A great example of financial institutions offering incentives for mobile digital wallets is the free Kasasa Cash Back Checking rewards program offered through Philadelphia Federal Credit Union. When asked about banks and credit unions on campus and if she uses them, Hardi, a student at Temple University, stated, “Yes, I do use them on campus. They are very accessible and are located in almost all the buildings here.” At Temple University’s Philadelphia Federal Credit Union, for example, not only do they offer up to $10 in monthly refunds for nationwide ATM fees, but they also offer a $15 sign-up bonus. Additionally, for every monthly purchase, they give up to $10 in refunds for iTunes, Amazon, or Google Play. These money-saving incentives are very appealing. From rewards programs on debit card purchases to surcharge-free ATM networks, these incentives and programs can make financial institutions very attractive.

Improvements

As we all know, when financial institutions make their way into high schools and colleges, they bring educational materials, rewards, and paper forms. Given that Zoomers place a high value on environmental concerns, with 67% believing that climate change should be a major priority, go paperless whenever possible, e.g., QR codes. Not only will going paperless show your alignment with Zoomer environmental considerations but there will be less friction in the sign-up process. Consider this: not many students want to waste time filling out a paper form when they can scan a QR code instead. Consumers utilize QR codes on their cellphones in about 25% of cases, but that is the whole population. What about the Zoomers on campus? It’s crucial to understand how the educational system is assisting Zoomers on campus. Many colleges have effectively implemented QR codes in their classrooms or college campus events. It’s less traditional and more focused on technology. AI applications not only deliver the same knowledge in a more efficient manner, but they also improve student engagement. 

Not surprisingly, social media is where Zoomers obtain a lot of information, and that also includes financial habits. Financial institutions should make sure that they are posting content that is relevant to Zoomers on the platforms they are engaging with— e.g., Instagram, TikTok, Twitter, and Facebook. YouTube and Instagram are ranked the most used social media platforms by Zoomers. Approximately 89% of them visit or use YouTube. 

Financial institutions can take advantage of this opportunity to teach Zoomers about their finances, as over 80% of Zoomers are concerned about their finances, and about 72% of Zoomers interviewed in a Pew Social Media study say they use at least 11 of the social networks included in the study (Instagram, TikTok, Snapchat). “I do think social media can bring more awareness about financial habits, but we have to be careful of what information we can trust. I have seen some ads or posts on social media that gave the wrong information about banking,” says Hardi, a Student at Temple University. That said, many of these advertisements and information are not directly from financial institutions. Many Zoomers would benefit immensely from learning information directly from a financial institution’s social media. That is why it is crucial to have a strong and relevant social media presence.

To summarize, when it comes to luring Zoomers to campus, having personalized experiences, incentives, similar ideals, and a social presence are incredibly crucial. With practically everything being done on social media today, it’s critical to recognize that it’s one of the primary resources for  Zoomers. More digital options, such as QR codes or allowing payments from more modern channels like Amazon Alexa, have the potential to completely shift the game and improve their banking experiences. For many Zoomers, having a positive impact on society is extremely important, as is having a sense of ownership. Knowing a handful about the Zoomer generation can aid financial organizations in making numerous improvements to their customer or member experience and convenience.

Read more about Zoomers in Zoomer Generation’s Core Qualities and Values. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com

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Top RfP Test Cases, Use Cases, and Case Studies We’re Watching

Request for Pay (RfP) is a functionality offered by TCH’s RTP® Network that allows a company or individual to send a “request” to be paid for a good/service. The receiver needs only to click a button to accept, and the payment is sent in real-time at that moment or at a scheduled date. Bill payers don’t have to worry about keeping track of various bill pay systems, and billers accelerate their receivables and benefit from a good funds model, meaning no failed payments due to NSF or incorrect account information. RfP is said to have the potential to revolutionize bill pay as we know it. There are some exciting RfP test cases already in market today, here are a few of the ones that we’re watching right now:

BNY Mellon

In May 2021, BNY Mellon was the first bank to offer RfP to corporate clients (white-labeled as Real-Time E-Bills and Payments). They were also the originator of the first ever TCH RTP transaction in 2017. According to BNY Mellon, key advantages of RfP for billers include higher straight-through processing levels, faster collections, simplified reconciliation, increased transparency, and lower costs. For the bill payers, they benefit from better convenience, transparency, and control of their cash flow. It’s expected that this solution will be particularly appealing to businesses where there is very high volume, and a need to quickly collect payments e.g., utilities, credit card companies, cable, internet, and cell-phone providers. 

In September, wireless carrier Verizon collaborated with BNY Mellon and Citigroup to expedite delivery and processing for their bills. In this partnership, BNY Mellon is the billing bank, Verizon is the biller, and Citi is the consumer’s bank. They are emphasizing to customers that this service is a way to avoid overdrafts. This is a convenient alternative for customers who have weekly budgets or irregular income streams, making automatic bill payments unfeasible. 

Chase Bank

In August 2021, Chase Bank announced that they are launching a B2B payment option using RfP, which will enable immediate wholesale payments between companies and certain consumer to business transactions (e.g., buying a car). For the buying a car example, consumers who aren’t taking out a loan can make a real-time digital payment instead of cash, cashier’s check or wire transfer. For corporates, this will be helpful because with better transparency, corporates will know when they were paid in real-time so they can ship a product or provide a service. For example, a gas distribution company can get paid on the spot after replenishing gas tanks instead of waiting for ten days because of the paper invoicing involved. In particular, smaller firms that are burdened by paper billing, ACH and wire fees will benefit. Approximately 42% of B2B payments are still done using paper checks. The full scale launch will include other The Clearing House RTP Network participant banks, and eventually B2C and B2B use cases. 

U.S. Bank

To provide new efficiencies, U.S. Bank allows billers to use RfP through portal, batch, and API-drive origination experiences. A payment related message is sent by the biller to customers through their bank, and the biller’s customer approves the payment. The biller then receives a status notification: payment, scheduled payment, or rejection. Richard Erario, executive vice president and head of global treasury management for U.S. Bank said, “Right now, we’re among a handful of financial institutions that have enabled RfP for billers, but we expect that number to grow considerably in 2022. Adoption by more financial institutions is critical to RfP’s success.”

Learn more about RfP in Request for Pay (RfP)–Exploring the New Frontier of Bill Payments.

Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without the burden of significant infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or info@alacriti.com.

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Zoomer Financial Habits: Loans

Ever wondered how many Zoomers are confused about their finances? With many newly entering the financial sector, about 28% deemed their generation “fiscally irresponsible.” Zoomers who are unsure how to handle their finances have started entering into the real world. Some are pondering student loans, while some are thinking of investing in the stock market. And some are even exploring home loans and much more. What exactly are these areas of interest for the older members of the Zoomer generation, and what are the statistics behind them? We explore this topic and the inputs of actual Zoomers here.

Student Loans

The average Zoomer holds $17,338 in student loans. To provide some context, the average tuition, fees, and room and board for the 2020-21 academic year increased by 1% to $22,180 for in-state students at four-year public colleges, according to the College Board. The same expenses at four-year private institutions rose by nearly 2% to an average of $50,770. The rise of college tuition, amongst other factors, means more students are looking to take out more loans. “My experience was okay. I had to take a loan when I was in college, so I didn’t mind it, but I didn’t like that they had all these interest charges,” said Kevin, recent Zoomer graduate and Software Development Engineer at Amazon.

If college students decide to continue their education at graduate school, their tuition will only increase, resulting in a likely need to get a higher loan amount. Neary 25% of student loan borrowers went to graduate school, and these students hold about half of all outstanding student debt. The average amount of student debt for an MBA student is $66,300, $71,000 for a master’s degree, $145,500 for a law degree, and $201,490 for a medical degree. Jamie, a graduate student at Montclair State University, said, “I needed to take out more loans for my master’s degree because I can’t afford to pay out of pocket for school by myself or even with the help of my parents; it’s too much.” 

Vehicle Ownership

With a large number of Zoomers in high school and beyond, many are considering automobile ownership. Zoomers who did not have taking out loans (e.g., vehicle ownership) on their list of priorities previously now have surpassed millennials when it comes to doing just that. For auto dealers and lenders to approach Zoomers, they will need to come up with a more tech-savvy approach. With only 36% of Zoomers having auto loans just a few years ago, they don’t want to end up in the same debt as their elders. Financial institutions need to focus on the goal of becoming debt-free when approaching Zoomers. Educating them and providing lessons will help a great deal since many do not intend to be in debt. However, they are just never taught how to prevent it.

Investing in Stocks 

80% of Gen-Z investors surveyed by LendingTree’s Magnify Money said they took out a loan to invest in stocks compared to 28% of Gen Xers and 9% of Baby Boomers. They are most likely to take out a personal loan, usually borrowing 5,000 or more. Zoomers are also educating each other on the importance of investing their money. 57% said they wanted to learn more about investing. Many use social media to get their financial investment advice from apps such as TikTok. The hashtag “#investing” on TikTok garners over 2.8 billion views. Many of these videos  center around investing tips in stocks. The downside is that all of these sources are not necessarily reliable or accurate. “I’ve seen a lot of finance tips on TikTok, but not all of them are trustworthy because anyone could have posted it, so I think tips coming from banks [or credit unions] can be more reliable,” stated Stacy, a recent graduate from Montclair State University. 

Investing in their future

When it comes to their biggest life purchases, such as buying a home, Zoomers want to hear from their banks and credit unions. The longer in duration and more personally meaningful the loan is, the higher levels of interaction, transparency, and access desired. Inadequate communication and effort throughout the loan application process can be perceived as a lack of interest from the bank or credit union.

Zoomers hold a 2% share of the housing market. It is important to note that within the next few years, this percentage will most likely increase. Building a better score is crucial for them, and with many financial institutions already offering free credit card reports, they should make sure Zoomers are aware as well. The main question now is how well these financial institutions are reaching out to the next generation of consumers, Zoomers. “Transparency is what we need. I didn’t know about the APR, so getting more context on how these loans are going to charge you will be helpful. The process of getting a loan was very simple, but the process of understanding how loans are given to you was a whole different story,” says Kevin.

From student loans to house loans, big expenses are coming up for the Zoomer generation. With many already taking advantage of low-interest rates and focusing on buying homes where the economy is growing, we can tell Zoomers also value rapid growth. With 64% of Zoomer’s getting financial information from YouTube, financial institutions must have a stronger social media and online presence. In order to step up their game and prepare for Zoomers, financial institutions must compare their basic principles to those of the Zoomers. After doing this, only then can they attract their upcoming customers and members. For Zoomers to be more confident about their finances, they need education from the direct source—their financial institutions.

Read more about Zoomers in Zoomer Generation’s Core Qualities and Values. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

Mobile Payments: What Will It Take to Convince Consumers?

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As if mobile payments at the point-of-sale weren’t already becoming more commonplace for merchants and consumers, the pandemic only exacerbated adoption even further. As the technology becomes more ubiquitous, the lion’s share of mobile payments in the U.S. is being conducted via four platforms—Apple Pay, Google Pay, Samsung Pay, and the Starbucks app.

While the Starbucks app once dominated the mobile payments space, in 2019, it was finally overtaken by Apple Pay with 27.7 million in the U.S using the payment platform that year, according to eMarketer. However, the Starbucks mobile app remains a formidable force, with 25.2 million users accounting for 39.4 percent of mobile payment app users. Google Pay and Samsung Pay come in third and fourth, with 12.1 and 10.8 million users, respectively. 

While mobile payments adoption has been slower in the U.S. than in many international markets, it is increasing. With the onset of the global pandemic, adoption has grown and is expected to continue to increase. According to Mercator, 39 percent of consumers reported making a purchase via a mobile phone (either online or in-store) in 2020, an increase of 5 percent over the previous year. What will it take to accelerate mobile payment adoption by convincing U.S. consumers to change their payment habits and embrace the benefits?

Accessibility

For many consumers, mobile payments are still an abstract concept. There are also key demographics that might be uncomfortable using the technology. Widespread adoption of new payment methods often takes time, as seen previously with the transition from cash to card-based payments.

In order to convince these consumers to adopt a new payment method, digital wallet providers need to emphasize convenience and accessibility. From sign-up to daily use, everything about the app’s design must be seamless and intuitive. Any amount of friction in the user experience can mean the difference between a consumer quickly integrating the technology into his or her daily life and one who never opens the app again.

Merchant Acceptance

Late adopters are out there, but for millions of other consumers who embrace the benefits of mobile payments, accessibility is not the issue. Despite their enthusiasm, they may be discouraged from using mobile payments due to a lack of merchant acceptance. Until merchant acceptance is as ubiquitous as credit cards and debit cards, mass adoption of mobile payment platforms will likely remain an uphill battle.

Consumers shouldn’t have to wonder whether their mobile payment platform of choice is accepted by the retailers and service providers they frequent most often. Businesses can display signage that helps take the guesswork out of whether a certain mobile payment type is accepted.

Merchants can also encourage adoption by offering customers enhanced rewards. Part of the Starbucks app’s success may be due in part to the seamless integration between its rewards program and mobile payment technology. Integrating these features (plus mobile ordering) into a single, sleek, and comprehensive app allows customers to place orders, make payments, manage their accounts, and collect rewards from the convenience of their mobile devices.

Disruption

Mobile payments took off in India after the central government announced the sudden nullification of large-denomination Rupee notes. This announcement left millions who were previously dependent on cash transactions panicking to find a secure and legitimate way to pay for goods and services. Without a similarly disruptive force giving consumers a real reason to change their payment habits in the U.S., adoption is expected to remain slow. However, the fast rise of mobile payments in other parts of the world could convince U.S. consumers to embrace the trend as well.

The Bottom Line: Mobile payments can be faster, more convenient, and more secure than traditional payment methods. Convincing consumers to overcome the hurdles that challenge widespread adoption will require creative thinking from mobile payment providers and merchants alike. Enhancing accessibility, broadening merchant acceptance, and embracing disruption are just three factors that can help encourage a permanent shift in consumer behavior.

*This is an update on an original post published July 2019

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P2P Money Movement – The Retrospective You Didn’t Know You Needed

Person-to-person money movement is right there with mobile payments as the number one trend over the past fifteen years. It’s been a hot topic at every conference I have been to in my career and is never far from the payments discussion at any financial institution I have ever stepped foot in (over 200 globally at this point). The experience and ease of moving money from one person to another have evolved a lot over the years, now occurring  in milliseconds, whether domestic or global. However, it hasn’t always been this easy and still is inconsistent 20 years after the launch of PayPal, which helped start this whole thing. So let’s take a look back at where we’ve been and where we are going. 

The 2000s – P2P Launches 

It’s weird to think that 2000 was over 20 years ago. I know every generation goes through something like this, but 2000 had so much build-up as the 1990s waned that by the time Y2K arrived, we knew things were about to be different. And as Elon Musk and PayPal launched into revolutionizing payments, another equally important trend was unfolding. Everyone suddenly had cell phones, enabling communication no matter where they were at all times. By the middle of the 2000s, cellphones became smartphones, and in the world of payments, three new companies/products solely focused on money movement from an individual to another individual launched, Venmo in 2009, and PopMoney and clearXchange in 2010. The biggest question I recall from this time was, how to generate revenue from what was free money movement?

The 2010s – P2P for the Masses 

 By 2010, digital banking was in full swing. You could deposit your checks from anywhere with a smartphone though most of us were still getting used to doing that at an ATM versus in the branch. Sending friends money was still dominated by either handing them cash in person, sending them a check, or setting them up on your bill pay center to outsource the check-writing process to your bank. This is unless they were on the PopMoney network or serviced by the same bank. For me, P2P started when a friend mentioned Venmo, and the rest of that story, as they say, is history. My circle of friends adopted the app, and the same few dollars have bounced back and forth ever since! Venmo jumped the shark and got to the consumer market, one that clearXchange and Popmoney had been navigating through the financial institutions to reach slowly and steadily for most of the decade. Then clearXchange merged with Early Warning, and the financial institutions got what they were looking for with the launch of the Zelle Network. Also worth noting here, in 2017, The Clearing House (whose ownership overlaps with EWS) launched a real-time money movement network, RTP®, enabling real-time payments to move instantly from any account connected to the network to another. 

The 2020s – Today and Tomorrow 

Today, the original use case of P2P payments, done by both the P2P closed-loop players, is dominated by CashApp and Venmo. Also in the space is the entirety of the GAFA (Google Pay and Apple Pay) crowd and the dominant player in the bank space, Zelle. The question that irked the market back in the early 2000s remained though. How do I monetize these transactions? For many financial institutions, the P2P space still represented a cost. However, the closed-loop players started to adapt their offering. While the money movement from person to person as well as money into the network remained free, the applications started to introduce fees and new features that started to capitalize on their large user bases. Whether that’s merchant acceptance fees, instant transfers out of the wallet to a bank account, or purchasing crypto, the evolution of P2P has moved way beyond the initial use case. However, simplifying the money movement from one bank account to another bank account is a story that will continue to evolve. With the RTP network gaining in reach and the coming launch of the FedNow network, the P2P space will likely continue to grow and expand, and the ubiquity of reach is getting closer to reality. 

Learn more in the webinar, Payments Modernization Update: What FedNow, Nacha, and TCH Updates Mean to Your Payments Strategy.

Alacriti’s Cosmos for RTP® enables financial institutions and organizations to quickly and seamlessly connect to The Clearing House’s RTP® network without the burden of significant infrastructure overhauls or capital investments. To speak with an Alacriti real-time payments expert about RfP, please contact us at (908) 791-2916 or info@alacriti.com. 

Alacriti Blog

Buy Now, Pay Later – Good, Bad, or Somewhere in the Middle?

If you hadn’t heard of Buy Now Pay Later (BNPL) before, you probably have by now because over the last 18 months, you couldn’t hide from it. Bringing in some of the largest FinTech valuations, the BNPL space is really on fire. For the skeptics, BNPL represents a questionable foray into getting consumers to overspend on things they don’t need or can’t afford. For the proponents, BNPL represents a far better alternative to credit cards, which often feature costly APRs to access the credit needed to make purchases. Realistically, the truth most likely lies somewhere in the middle of these two sentiments, but what does it mean to your financial institution’s payment strategy.

For starters, I will disclose that I have made a few snap purchases over the past 18 months leveraging BNPL provider offers during the checkout process. The offer to make installment payments at zero percent was certainly a driving factor in that decision. Contrary to the pessimistic POV mentioned above, I had the money in hand to make both purchases. However, the offer of essentially a zero percent loan for 24 months (so long as you make your equal installment payments) was an offer I am just not wired to say no to. The experience on both purchases has been amazing, and the installment payments for one of the items continues on its monthly cadence with a nice text reminder that the next installment payment is about to be made. 

So what’s the big deal? Well, for starters, BNPL offerings are moving up into the checkout stream, as mentioned above. The services themselves are being adopted by a large number of retailers that are looking to take advantage of pent-up demand for purchasing. By offering the BNPL option, they give consumers the choice and convenience with an instant credit offering. In the past, only the largest box stores and high-end retailers would offer this in the form of “store credit cards”. The introductory rate on those offers were, in essence, BNPL type installment offerings. However, the penalty for missing a payment or being late was the same as the standard card offerings or even higher APRs (typically between 20-30%). BNPL has found a nice niche with consumers, and the valuations of the space are eye-popping, indicating this isn’t going to be a trend that will slow down any time soon. 

So how does BNPL fit into your payments strategy? As we’ve discussed in our transformation discussions, getting your infrastructure ready to handle new payment types or use cases is a key step in the journey. BNPL is rapidly changing the payment space, taking a POS purchase and injecting a new option to do installment payments right at checkout. With access to new payment types and rails, new ways of conducting commerce will continue to become available. They will likely “disrupt” payment experiences that are dominated by a single payment option today (e.g., any credit/debit experiences that feature high fees/penalties). The key to a successful payments strategy is to be in a position where you can adapt to the market dynamics at play and have systems that will easily connect to or extend to the new market offerings. Making it easy to link your consumer’s account to their BNPL vendor of choice is a great example— your institution remains the primary account for the consumer while enabling them to transact how they want, where they want. This journey is just starting. What is your strategy going to be?  

Read Digital Transformation – Your Guidebook Has Arrived for the phases of a successful digital transformation journey. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

Zoomer Financial Habits: Bill Pay

*Originally published on CUInsight.com

There are various generational differences when it comes to financial habits. Let’s begin by talking about bill pay. What is it, and how does it work? If you are familiar with the payments industry, you know electronic bill pay is growing extremely fast. Its fast growth can be compared to Zoomers, whose financial impact is also on the rise. Financial institutions recognize that their future customers or members are Zoomers. They value speed and efficiency, and the most modern payment experience is extremely attractive to Zoomers since some are already paying their phone bills and about 42%, their tuition. Here, find out some critical facts about Zoomers and bill pay from data and Zoomers surveyed for this blog.  

It’s Faster and Convenient

Since Zoomers have grown up surrounded by technology, mobile payments through their smartphones are a given. They demand newer ways to pay and expect transactions to happen at a faster pace. They want a more seamless experience when it comes to billing and payment services. Therefore, they prefer to pay bills by linking their debit cards, cutting down on paper billing statements, and choosing a digital payment. For Zoomers, it also means reduced paper waste, which they value so highly that they are willing to pay more for ecologically friendly services. As the next generation of workers, “generation green,” roughly 73% of Zoomers are willing to pay up to a 10% price premium for a more sustainable option. So, if financial institutions wish to attract a larger Zoomer audience, this is a critical factor to consider.

However, let’s not confuse a Zoomer’s interest in digital payments with wanting to bank completely online. Maha, student, and CEO of Maha Cosmetics shared, “With a robot representative, it can get tedious because they might not be able to solve your issues. I would prefer [a human representative] so I don’t have to drive and be face to face with someone. It’s more convenient to do it quickly over a chat box.” Financial institutions, while stepping up their game when it comes to automated payments and other advancements, should keep in mind that although the Zoomer generation is very digital, we still expect some sort of human interaction. “It adds a more personal touch, especially when I’m having an issue on my phone with my payments. I would rather talk to someone to get help,” Cristian, a recent graduate and project administrator at ITG Larson, shared. 

Credit Scores Are Definitely Important

With many Zoomers currently in college or fresh out of college, many may be in hopes of building up their credit scores. Connecting with financial institutions to obtain a credit card can help them build their score if they pay close attention to their payment history. Maintaining excellent credit habits and a good credit score requires making sure all payments are made on time. This brings up the topic of automated bill payments. They can be easy to process and are used by many Zoomers. But what else could be just as important to having a solid credit score when it comes to automatic payments? Convenience. It’s what Zoomers look for when it comes to the services they prefer. Kevin, a recent Zoomer graduate and Software Development Engineer at Amazon, stated he has automated payments set up which are linked directly to his bank account. So essentially, he only “[looks] at the statements afterward to make sure the transactions made sense.”

Experian’s 11th annual State of Credit report found that Gen Z has lowered its credit utilization rate and decreased its number of missed payments. The data shows that Zoomers have missed fewer payments than other generations. It serves as evidence as to how much Zoomers care about building their credit—which means making on-time payments. They are being better educated on credit and can benefit from various tools and sources that provide free credit scores and that show the potential of paying off debt or opening a new credit line. 

Zoomers are starting to have long-term goals when it comes to building credit. They don’t want to make the same mistakes their predecessors made when it came to debt. One out of every two Zoomers say in the next ten years, owning a home will be their challenge but it’s something that they plan on working on. “I always make sure I schedule my bills ahead of time because I’m scared to see my credit score drop, especially now that I’m working towards purchasing a home in the next couple of years,” Lashawna, a recent graduate and Marketing Coordinator at a mortgage company stated. Zoomers are looking ahead and plan on making careful decisions when it comes to paying off their bills. 

It Goes Both Ways

Although not every Zoomer is savvy when it comes to credit or bill payments, a lot of them want to learn more about their finances. “I don’t know where to begin when it comes to banking, so any help or tips would be great,” says college student Kayla from the University of New Haven. For financial institutions to go to schools and colleges and meet Zoomers where they are could serve a tremendous benefit, especially those who are newly entering higher education. Resources should be customized so that they resonate with Zoomers more. That said, offering value-based programs to attract upcoming college students can be highly effective. When coming up with a strategy, keep in mind that becoming educated about the preferences of Zoomers is just as key as effectively teaching them about building credit scores and other important financial decisions. 

Read more about Zoomers in Zoomer Generation’s Core Qualities and Values. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

Paperless Billing: Why Make the Switch?

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It’s undeniable that technology has impacted every aspect of our lives, but that doesn’t mean traditional ways of doing business have been eliminated completely. For example, paper billing remains a critical touchpoint in many business-to-consumer relationships, even though electronic billing is second nature to countless consumers.

Paper statements do provide benefits, including tangible payment reminders, easy record keeping, and a natural touchpoint for customer communication. But electronic billing can deliver those benefits and more. Here are four reasons why businesses should continue encouraging their customers toward electronic bill presentment.

  1. Enhanced Security

Paper bill statements require businesses to print and mail account information to customers. That printed information makes its rounds through several people and departments before arriving in the hands of the correct customer. These lengthy, manual processes can give rise to human error as paper statements are easily lost and can potentially end up in the wrong hands.

Electronic bill presentment allows businesses to communicate personal information directly to customers, reducing the risk of lost statements and mail fraud. Going paperless also makes it easier to maintain consistency because it ensures that statements are sent at the same time each month without relying on a third party. In addition, accessing historical statements through a username and password provides another layer of security to help keep customers’ account information safe.

  1. A Reduced Carbon Footprint

Paper waste is a growing problem for offices across the country and accounts for 26% of the total waste in landfills. Switching from paper to electronic statements can help businesses take a step toward greater environmental sustainability. And for customers, electronic statements can help reduce unwanted clutter and paper waste.

  1. Reduced Costs

Electronic bill statements can save businesses time, money, and other resources. It often requires a whole staff to fulfill paper bill statements month after month. Workflows could span weeks, with little time for other tasks between billing cycles. For some businesses, especially large ones with heavy billing operations, paperless billing can help significantly reduce operational costs.

Aside from the paper itself, traditional statements require a constant supply of printing materials, postage, and manual labor. Paper statements also require business arrangements and regular correspondence with postal or shipping services. In contrast, e-billing can help businesses cut back on recurring expenses and improve the bottom line.

  1. Accelerated Operations and Payments

Sending paper statements in the mail is a significant administrative function that requires many dedicated hours each month. Paper statements require printing, fulfillment, and postage for every recipient. On the other hand, paperless billing streamlines the process and gives employees more time to focus on strategic tasks.

Much is left up to the customer when paper statements are sent in the mail. Weeks could go by before the customer ever opens the bill, leaving a long period between a business’s request for payment and receipt of funds. Because email is instant and a regular part of most customers’ daily lives, an electronic statement is likely to be viewed sooner. Customers may also make payments sooner, especially if they are given a variety of payment options and empowered to submit payments online.

The Bottom Line: There are many benefits in breaking away from traditional paper statements. Going paperless not only reduces environmental impact but can also help businesses reduce costs, reprioritize workloads, and improve cash flow by accelerating payments. For customers, electronic statements offer convenience and enhanced security leading to an overall improvement in customer satisfaction.

More on bill pay in Bill Payments: Helping Small Businesses Think Big.

*This is an update on an original post published July 2019

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

Ways Financial Institutions Can Attract Zoomers

First thing’s first, about 67 million Zoomers make up 20% of the U.S. population, and 64% of Zoomers look for a more personalized banking experience. With so many Zoomers entering the financial sector, it is important to understand what banks, credit unions, and community banks can do to entice Zoomers to choose them. From increasing technological services to making their products and services fast and efficient, financial institutions can do so much to attract their younger audience.

Credit unions tend to be community-oriented and offer lower rates, which are qualities that particularly resonate with Zoomers. However, to attract the Gen Z population, credit unions will have to make many technological advancements. As mentioned in the previous blogs, Gen Z values speed and efficiency. With P2P companies on the rise, e.g., Cashapp and Zelle, Gen Z wants to see more digital payment services due to it being one of the fastest-growing methods of payment. If this falls short in any way, Gen Z will gladly turn to anything that provides them with a quick and high-quality solution. 

Offer Financial Education and Benefits

Small things such as reward schemes and benefits will appeal to Zoomers. They would more preferably seek a financial institution that can expedite and improve their experience. As previously mentioned, Gen Z is interested in learning about financial education. Making their learning process easy can help them become more financially self-sufficient and conscious. Including informative ways Zoomers can have a more reliable financial experience, such as personalized budgeting advice or money management tips, will help them explore their options. Making the financial learning curve easier by using integrated systems will allow them to become more financially independent and aware. In turn, this will improve the experiences of such services.

Increase Utilization of Digital Payments

If they had the opportunity, about 75% of Zoomers said they would utilize mobile payments more regularly. This involves having easy-to-access, high-quality payment experiences on their smartphones. Only less than a third of Zoomers stated that they were comfortable providing personal information online, while 18% say they are comfortable providing their financial information. Zoomers are also concerned about social and environmental issues, with 90% believing that the companies with which they partner should contribute to these causes. 75% of the 90% will check to see if the corporation follows through on its promises.

Have a Strong Social Media Presence

Gen Z, being the most tech-savvy generation, relies on their computers and smartphones for many things. Self-service products and services allow them to access things faster and help make their experiences better. Almost everyone who is a Zoomer has some sort of social media presence. As a result, having a strong social media presence is critical for financial institutions. Not only will they be able to reach more consumers overall, but most importantly also be able to target  Zoomers specifically. An important aspect of social media is that even financial institutions can leverage topics that are trending with Zoomers. Financial institutions, for example, still utilize a big number of paper checks; in response, they can tweet ways in which digital payments are environmentally friendly. With just this, they accomplish two things: attract more Zoomers and spread the word about digital payments.

Algorithms and Hyper-personalized Experiences

Using algorithms to see what their customers access most will help them understand how to better serve their audience. These hyper-personalized experiences will go a long way in attracting more Zoomers to become devoted customers or members of financial institutions. Benefits such as cost waivers or even free accounts such as Spotify, Hulu, or Netflix subscriptions are other ways businesses might appeal to a younger audience. 

About two-thirds of Zoomers are worried about building credit, and that same amount is also eligible for bank accounts. Attracting Zoomers requires value-driven programming and technological advances. Zoomers always have another alternative if this isn’t done correctly. The younger generation, in search of a quick fix, will always resort to those institutions that provide it.

Read more about Zoomers in Zoomer Financial Habits: Bill Pay
Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.
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Payments Transformation – The Journey from Engines, to Hubs, to Platforms

*Originally published on CUInsight.com

Transformation is a term that is thrown around a lot in our industry, and when you take a look at banking and payments for the past 15 years—it’s understandable. Many of the back office systems and central infrastructure that keep our economy humming along were designed and coded before I was born (along with anyone else born in the 1980s or later). However, “payments transformation” is more than just taking the existing payment operations we have today forward. Transformation involves simplifying, streamlining operations and then transforming the operation. To fully understand this, it makes sense to examine the market as a whole and what the arc of transformation has looked like.  

Monolithic Engines – For payments, most financial institutions traditionally had one specific solution for each type of transaction. They were built specifically to handle either low value/high volume payments (e.g., ACH Payments), or high value/low volume transactions (e.g., Fedwire or CHIPS). On the retail side of the house you would have additional systems for your card portfolio (e.g., credit, debit, pre-paid). Each of these engines was likely deployed on-premise, though in later years many moved to shared data centers. Due to the customizations that many financial institutions made to these solutions, many still run today!

Payment Hubs – If I knew exactly who coined the term I would give them credit, but sometime in the mid-2000s ‘payment hubs’ became a very hot buzzword. Banks and credit unions started reviewing their payment operations and trying to consolidate their payments infrastructure. During this time there was a lot of consolidation through mergers and acquisitions, so this was a period where many financial institutions had two or three engines for each clearing and settlement rail. The payment hub was a way to start that consolidation strategy—bringing the overlapping solutions together in a systemic approach, and attempting to bring both the high value/low volume and low value/high volume systems together from an operational perspective. The biggest headwind payment hubs faced was they were often defined by “rip and replace” projects due to their high price tags. 

Payment Platforms – The evolution of the payment hub discussion has brought us to where we are today. In addition to the heritage payment types that have shaped and defined our money movement experiences for the last 40 years, we now have to adapt to new real-time payment types. Real-time payments are defined by their always-on, always-available nature and their settlement requirements, which puts new demands on  operations. While the payment hub was focused on bringing the heritage payment world together, the payment platform is focused on creating a new base to grow outward from. It builds on the ideals of consolidating operations for payments into a single solution. However, the real value is giving institutions a composable platform in order to deploy and connect to multiple payment clearing and settlement systems. In other words, simply and seamlessly giving them the ability to adapt to market demands as they grow or change. With payment platforms, having to “rip and replace” existing infrastructure was eliminated due to their cloud-based deployment. Cloud-based solutions lower the cost of entry to a point where many financial institutions can start their journey with a single payment type and evolve the strategy to coexist with existing infrastructure within the institution. 

No matter where you find yourself on the payment transformation journey, our market continues to adapt and change. It’s an exciting time to be a part of this industry and I can’t wait to see where these new payment types take us and what new value they create for our economy at large. 

Learn more about payments transformation in the webinar, Payments Modernization Game Plan: Moving Forward with Existing Infrastructure. 

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

4 Ways Chatbots Are Revolutionizing Electronic Bill Payments

Chatbots are transforming how we interact with businesses every day. Consumers can ask questions, receive suggestions, place orders, and make payments with the help of chatbots designed to streamline the customer journey. The technology also provides the benefit of analyzing past behavior to help predict future actions. This data mining allows chatbots to “learn” from historic behavior and apply this knowledge to curate more personalized experiences going forward. 

Chatbots also give businesses the ability to provide on-demand customer service that doesn’t rely exclusively on physical teams of customer service representatives—something that became essential almost overnight during the global pandemic. Rather, chatbots can be deployed strategically to service customers in tandem with their human counterparts, delivering a more streamlined and coordinated customer experience than ever before.

Bill payments are just one step of the customer journey where chatbots have a big impact. Here are four ways that chatbots are revolutionizing how businesses present billing information and accept electronic payments from their customers. 

  1. Fast answers to frequently asked billing and payments questions

What’s my account balance? When is my bill due? Can I make a payment today? A chatbot can answer all of these questions (and more) without human intervention. A chatbot accessed via an intelligent personal assistant (Amazon Alexa, Google Assistant, etc.), a messaging app (such as Facebook Messenger), or directly on a website can process these questions and return answers with the touch of a button or a simple voice command.

  1. Consistent interactions with customers

Chatbots use natural language processing and machine learning to constantly refine their interactions with customers. For example, a chatbot can understand a question that’s asked in a variety of ways and return a consistent response that accurately answers the inquiry. The technology is also becoming more adept at detecting frustration and transferring dissatisfied customers to human agents to help address challenging situations. This allows companies to maintain more consistency in their interactions with customers and allows them to review historic interactions to identify areas of improvement.

  1. Cost savings

Servicing customers is often a significant expense for businesses. Chatbots can help lessen the burden on customer-facing teams by freeing them from routine requests and allowing them to focus on more complex inquiries. A report from Juniper Research predicts that by the year 2022, chatbots will be responsible for cost savings of approximately $8 billion per year. As businesses constantly evaluate new ways to reduce costs and improve efficiency, chatbots may be a natural place to invest in streamlining operations.

  1. Accessibility for all businesses

Implementing a chatbot might seem like something reserved for large businesses.  However, small and medium-sized businesses can also reap the benefits of chatbots without building them themselves. Select electronic bill presentment and payment (EBPP) solutions offer chatbots as part of their offering, making it easy for businesses to get up and running quickly.

The Bottom Line: Chatbots are quickly becoming table stakes for businesses of all sizes due to the benefits they provide across the customer journey. Implementing a chatbot for electronic bill payments can be as simple as working with an EBPP provider that offers a turnkey and fully integrated solution.

*This is an update on an original post published August 2019.

Alacriti Blog

Why Should Businesses Offer Flexible Payment Options?

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Customers have seemingly endless options when it comes to their commerce decisions, from what they buy to how they buy it. As this universe of choice keeps expanding, businesses are often left with the challenge of how to set themselves apart from the crowd. 

Payments play a crucial role in the overall customer experience, but they can sometimes be an afterthought. However, investing in a flexible, customer-focused bill payments experience can help businesses get paid faster, reduce the risk of bad debt, and adapt quickly to changing customer expectations.

Get paid faster

Operational efficiency and organizational growth are fueled by steady, predictable income. Streamlining bill payments for your customers can help reduce barriers in getting money from their accounts into yours. Manual billing processes and traditional payment methods like paper checks require time and effort, which can be a burden on internal resources. They also require work from your customers and can create a less-than-ideal interaction with your brand.

An electronic bill presentment and payment (EBPP) solution can help deliver bills to your customers faster and encourage on-time payments. Offering electronic funding methods such as credit cards, debit cards, and ACH allows payments to be processed faster than paper checks and requires less work than in-person payments. Offering customers these electronic payment methods is a simple way to accelerate cash flow and improve the overall experience.

Reduce the risk of bad debt

Slow payment processing isn’t the only problem plaguing cash flow within some organizations. There are many reasons why customers might miss their bill payments, from financial hardships to simply forgetting their payments are due.

An EBPP solution can help reduce the risk of bad debt by sending regular communications to your customers regarding their outstanding balances and upcoming due dates. Email and text messages can be scheduled to reach customers at regular intervals in the communication channels they use most, reducing the risk of forgotten payments. An EBPP solution can also be configured to offer payment options like autopay, recurring payments, and payment plans to give customers more control over their finances.

Adapt quickly to changing customer expectations

Innovative apps like Starbucks and Uber are elevating your customers’ expectations for simple, seamless payments. More and more, customers are coming to expect the same level of high-quality digital service from all businesses they interact with. And, the global pandemic has accelerated demand for increased digitalization—and that extends to payments. 

Flexible payments are about more than just a sleek mobile experience. An EBPP solution can also give your business access to chatbot technology that can incorporate into the apps your customers use most, like Facebook Messenger. Chatbots can also be leveraged via intelligent personal assistants like Amazon Alexa and Google Assistant, allowing customers to request account information and make voice payments using natural spoken commands.

The Bottom Line: Flexible electronic bill payments are a must for organizations of all types and sizes. The right EBPP solution can help your business transform costly manual processes into payments that accelerate cash flow, increase satisfaction, and engage customers in innovative new ways.

More on changes in consumer expectations in Turn and Face the Strange Changes in the Payments Industry.

*This is an update on an original post published May 2019

Today’s legacy and siloed banking technology infrastructure limit financial institutions’ ability to rapidly innovate. It’s time to look at money movement in a new way. Alacriti’s Orbipay Unified Money Movement Services does just that. Whether it’s real-time payments, digital disbursements, or bill pay, our cloud-based platform enables banks and credit unions to quickly and seamlessly deliver modern digital payments and money movement experiences. To speak to an Alacriti payments expert, please call us at (908) 791-2916 or email info@alacriti.com.

Alacriti Blog

4 Ways to Reduce Friction in Bill Payments (Infographic)

Consumer acceptance of online bill payments is increasing, along with expectations for a seamless bill payment experience driven by retail leaders and increasingly innovative payment methods. To reduce friction in bill payments for consumers, you have to think one step ahead of them and offer 24/7/365/anywhere convenience—whether online or through more traditional channels.

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