Digital Payments

Agile Processing, Scalability And Reliable Partners

Ideas like “giving smaller organizations choice” are gaining new meaning in the epic first half of 2020. What seems like a lifetime ago, back in mid-January, it was still all about adding digital payments at one’s own pace, with many prioritizing brand flash and ready cash over backend tech investments and disaster planning.

That posture was not rewarded when everything changed. In fairness, the crisis was unforeseen in almost every business case, from the biggest bank to the smallest food truck. Worldviews have now changed, especially among the mid-market players, SMBs and mom-and-pop operations representing America’s Main Street business districts. They need solutions, and they need them now.

In the latest in his series of PYMNTS TREND Talks, themed for smaller organizations, i2c President Jim McCarthy discusses the benefits of agile processing and scalability in unified platforms at times when speed, accuracy and reliability matter. Like now, for instance.

“When I think about flexibility, agility, reliability, scalability – they're all being redefined under the circumstances we're all living in,” McCarthy recently told PYMNTS. He pointed to the stimulus disbursement debacle as a predictable outcome of not being prepared. That’s assuming businesses were looking for “it” at all, which most were not, as PYMNTS research has shown during the pandemic.

The resulting acronyms, such as work from home (WFH), order to eat (OTE) and mobile order-ahead (MOA) – all a result of coping with lockdown living – represent a societal migration of magnitude.

“The extreme nature of what happened … and the response to [the crisis] showed some of the weaknesses in terms of … how people need to think about planning and being ready for … [the] Black Swan event,” McCarthy said, adding that moving entire workforces to secure remote operations with online collaboration requires technology partners that behave like utilities. Shutting off is not an option.

“We deal with PCI and data … security … and [we’re] very serious about who we are … as a payments processor,” McCarthy said. “One of our largest clients is Comerica Bank, and they service the Social Security Administration [SSA] and Veterans Affairs …through the world's largest … debit program, Direct Express. We as their partner have to stay up and running … and help those people who are sitting there waiting for the stimulus payments, waiting for other benefits they need to live. We can't disappear.”

McCarthy says i2c itself normally runs at 40 percent of capacity as a failsafe against unforeseeable spikes. Working with Comerica and the SSA, for example, has yielded the perfect data. “We already know there are peak days depending on when the money hits and how the money gets taken out. [There] are nuances to the way you need to plan. All of it comes back to flexibility and agility.”

C-suite feet-dragging on legacy system upgrades in 2018 and 2019 left many organizations with little ability to pivot when conditions worsened through Q1 2020. And when nothing changes, nothing changes.

There will be other “black swans,” McCarthy said. “This will become part of business recovery planning. Any enterprise of any size will have to really rethink the rainy day, and how you respond to these types of things. If you're … at the executive level in any organization, let alone … financial institutions and FinTechs, you really need to rethink how you plan [and] respond to these things, both [with] business systems [and with] financial planning and human resources.” That’s about agility.

“As a financial institution, you … have to tune your systems almost on a daily basis as things are changing as rapidly as … they are. Even rewards.”

Brex is an i2c that quickly retooled its rewards platform, turning it into a WFH benefit. “When you're flexible, when you can respond to the changes that we're seeing, I think it just reflects the need to have partners that can move with you. If you're stuck on legacy platforms … that are just not able to move as quickly as the market requires,” he said – well, you’re stuck.

“Having a single source code that's exposed through an API that allows … customers to pivot [and] pull back credit lines, send out invoices, change [their] work structure, tune [their] fraud screen, all through one point-and-click graphical user interface … gives our customers the confidence that they can change and drive their program in the direction it needs to go based on … the changing macroeconomic and socioeconomic conditions,” McCarthy noted.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.