When consumers are offered the option of receiving instant payment, they tend to accept it gladly. Research shows that 90 percent of consumers think getting paid faster is better than getting paid more slowly. But most of the time, they simply aren’t getting the choice, Ingo Money CEO Drew Edwards and Mastercard’s Sherri Haymond, executive vice president/digital partnerships, said in a recent discussion with Karen Webster.
Although PYMNTS/Ingo data found that fewer than 10 percent of consumers would rather receive checks than instant payments, checks are often the only option for corporate payouts, insurance disbursements or payroll payouts.
But the pressure is on to change that, initially created by digital-first firms that have pushed rapidly into instant disbursements because they weren’t tied to old, paper-based, batch-dependent legacy systems. And the past eight months of a rapidly digitizing economy amid COVID-19 have drastically accelerated that.
“COVID has really brought to the forefront that consumers want options, and they want everything to be friction-free and touchless and digital,” Mastercard’s Haymond said. “The last thing any customer really wants is a check, especially not now. We are hearing from corporations like insurance companies; they want to enable what consumers want in an easy, seamless way. But they don’t have the right kind of technology resources to put together that amazing end-to-end experience that will enable consumers to make those choices.”
Moreover, Ingo’s Edwards noted, companies are looking — increasingly impatiently — at their treasury-banking partners. Businesses wonder why some banks aren’t offering a suite of options, so companies can’t give their customers a full menu of options when it comes to getting paid.
Edwards added that such demands aren’t coming from a few off places. Instead, the desire to move into the instant-payments stream is increasingly coming from financial firms’ “largest and most lucrative treasury customers,” he said.
That steadily rising drumbeat of demand has inspired a new partnership that Ingo and Mastercard announced Wednesday (Nov. 18) to combine their efforts and help make instant payments the industry standard.
It’s a pact that Edwards said will allow the two firms to act on a shared vision to attack that $30 trillion a year still going out by check, along with ACH payments that desperately need modernization.
“We’re coming together to take this to the largest banks and the largest merchants in the market with a fully integrated and optimized combination of what Mastercard does and what Ingo does,” Edwards said. “We’re coming together in this partnership to take our combined platforms out and to go where the volume is.”
It’s not that banks don’t have access to instant technology, Edwards and Haymond said. It’s more the fact that big banks are so segmented and siloed that what’s available in one part of the organization — say, Zelle or RTP — might not be in any way connected to a firm’s treasury-banking operation.
And even when it’s all easily accessible, putting it all together into something that corporate clients can easily use and navigate to enable a suite of instant-payment options for customers is a massive undertaking.
But it’s an issue that Haymond said Mastercard and Ingo could largely take off companies’ plates. For instance, she noted that while Mastercard Send is a great platform for a push to a card, it’s even better when combined with Ingo’s various connections to all kinds of payment types. Wrapping the systems together into a single UX can “allow our joint treasury-banking customers to offer a fully integrated solution to their end corporates,” Haymond said.
By way of example, she mentioned an insurance company that will now be able to look to its treasury-banking partner for a turnkey, end-to-end solution to flip on payment choice for customers. The system will work seamlessly with the company’s primary treasury relationship.
What Happens Next
Edwards and Haymond said Ingo and Mastercard are already off and running with their new partnership. They’ve brought new treasury banking partners online and recently even won an RFP (which they can’t offer details on yet).
The executives said the goal is to keep moving full speed ahead in trying to close the great instant-disbursements gap between the digital economy and the old-school “smokestack” economy of pre-digital players.
Haymond said the only way to go is forward. The two firms aim to bring services to more banks, bring more corporates into the instant payments fold, and make sure progress moves down the food chain from the biggest enterprise-scale firms to medium-sized and even small businesses.
Edwards noted one thing that becomes incredibly clear as Mastercard and Ingo developed their partnership is just how powerful Mastercard’s global scale is when trying to break something like instant payments out of its niche and into the mainstream.
“That’s really what this partnership is about,” he said. “We’re giving the market, the banks and their treasury customers everything they need to offer an omnichannel, integrated experience that lets the consumer choose how they want to get paid. And [the] partnership with Mastercard — because they have such tremendous credibility and so much scale — can help us power our move internationally, which we’re focused on in 2021.”