Posted by Alison Arthur on 07 Mar 2019
On March 5, Alacriti hosted a webinar, “Why businesses need to embrace Digital Disbursements. Now.” The presentation featured speakers from Bank of America, Early Warning Services (Zelle®), and Alacriti.
The webinar discussed reasons why businesses that issue paper checks for customer payouts should consider adopting a solution that digitizes those transactions. With so much innovation in the payments space – from digital wallets to in-app purchases – B2C payouts remain largely tied to paper checks. Why is that the case?
The reality is that there are genuine obstacles that businesses might face when it comes to digitizing the payout process. First is that many businesses have legacy financial and accounting systems that are deeply tied to paper check issuance. If an organization’s payout operations are completely constructed around paper checks, it might require a significant amount of time, labor, and money to change those legacy systems. Some business may simply not see the value in making these investments in digital payouts and upending the tried and true processes they’ve come to rely on.
Another reason might be customer readiness. While some customers don’t think twice about receiving a paper check in the mail, Digital Natives are used to doing everything on their mobile devices, including financial transactions. The thought of having a financial transaction that isn’t fully digitized, like receiving a paper check, is only going to become more foreign of an idea as the population of Digital Natives continues to expand.
Finally, there’s the added element of security concerns. Accepting customer payments comes with a host of security and compliance considerations for handling sensitive customer payment information, the most notable being PCI DSS compliance. Some businesses might resist the idea of collecting, maintaining, and securing customer payout information on top of what they’re already doing for payments. This can add a new dynamic to security and compliance considerations that businesses might simply not want to deal with. But solutions like Zelle can help overcome some of these concerns.
Despite these obstacles, there are significant benefits that can be created for businesses that choose to make the transition to Digital Disbursements, the most important being the ability to meet rising customer expectations. As the generations continue to shift, there is going to be less of an appetite for manual, traditional payouts like paper checks. Businesses need to start thinking now about how to position themselves for the future and meet the changing needs and expectations of their customers for payouts. Because it’s likely going to be a key differentiator going forward.
Listen to the full recording to learn:
03 Sep 2019 Blog Paper or Electronic Billing: What’s Your Preference? Eliminating paper bills can benefit businesses, but some customers still rely on them. Your organization can encourage a permanent shift toward electronic bill presentment and payments (EBPP) by offering the right incentives.