There are many reasons for consumers to have a love/hate relationship with businesses that send them checks. There’s the unpredictability of knowing when they might arrive, as well as knowing when one will have access to those funds once they’re deposited. Then, of course, depending on who is sending the check, whether there will be any funds at all when the check is cashed.
Yet, Karen Webster noted in a recent conversation with TransCard CEO Greg Bloh, for all the reasons consumers don’t like checks, they still sort of do — since it’s better than not getting the money.
More to the point, Bloh said, though consumers don’t like checks, they do universally like to get paid — and the fact that they know what to do with the checks once they're received can be oddly reassuring.
A check, he noted, fulfills the three basic elements every disbursement method must have: It moves the money from business to person, it allows the work flow around the funds to be managed from the business to the person and it transfers the information about the payment along with it. The certainty around that has a pull for some individual consumers and small businesses (SMBs) — and probably will for a long time.
However, for a growing group of customers, what matters more is having a choice in how to get paid.
“Optionality is what the consumer is looking for today,” Bloh said. “And making that choice needs to be easy, since the last thing that a consumer wants to do is to fill out information that is complicated, or go somewhere else to enroll. All that adds stress and complexity to the experience.”
Maximizing The Investment In The Consumer Experience
Giving consumers a choice in how to be paid means businesses must commit to making the last part of the process as frictionless as the first.
Businesses making payments to consumers, Bloh told Webster, have been anything but lax in building web portals and mobile applications to provide a great consumer experience, right until they get to that last page. It’s there — the moment of truth about how that consumer wants to be paid — that the digitally optimized journey hits the virtual brick wall. There’s often only one, maybe two choices: the check and possibly ACH.
“Providing that customer with immediate gratification at the end of that interaction, that last step, is important because that is the part of the process that drives the most gratification to the individual,” he said.
That instant gratification might be about getting paid right away, but it might just be about selecting the payment type one wants to see. Bloh noted that, by his count, there are maybe 10 “viable, really good options to receive payments,” and having those options there for the consumer who wants them is important. That's because what the consumer wants more than anything — even more than speed of payment, in some cases — is their own way, and to be able to receive money how they want it.
“The best experience across a customer base is optionality,” Bloh said.
The Power Of The Data
Just as important as those options, Bloh noted, is transparency around the payment (i.e. the data that goes along with the funds so that the receiver knows where those funds came from, and for what they are to be used). That’s especially true when payments received differ from what the consumer thought they were going to be paid.
That is yet another source of friction that forces the consumer to call the business and track down the details — and hopefully find someone to explain the discrepancy. A problem, Bloh said, that can be eliminated if businesses send the right documentation with the money.
“A simple example is an insurance payment split into multiple payments,” he explained. “The supporting document helps the customer understand what to expect going forward from the company and when. That alone will save a lot of angst for the customer, and a lot of time, effort and money for the company sending the payment — since [it] won’t have to devote manpower to answering those questions.”
Customizing Options To The Consumer
There might be 10 viable, good options out there for pushing disbursements to customers, Webster noted, but do businesses need to offer consumers all of them? Is there any middle ground between one and 10?
Of course, Bloh noted — but offering the “right” number is about what’s right for the business and its customers, not necessarily how many options are on the list. Some methods aren’t right for some groups, while other methods might come laden with regulatory complications that make offering them a bigger logistical problem than is worth taking on. What and how many choices to offer may also depend on the relationship those consumers have with the business dispersing the funds, and how often they interact with each other, which may be different for companies at different times in the customer lifecycle.
Regardless, he said, the future of consumer disbursements — and its evolution going forward — will be about a lot of paths, and about consumers being able to choose between more than two options (check or ACH) when deciding how they’d like to be paid by the businesses that owe them money.
“Five years from now, there will still be a lot of checks being sent out,” Bloh said. “But we’ve driven the number of disbursements by check lower every year — and with optionality and education, we can keep moving those numbers down. And that is the right direction for them to be moving.”