Can push payments make the push into full acceptance by consumers and corporates?
Drew Edwards, CEO of Ingo Money, stated in an interview with PYMNTS’ Karen Webster that the concept of paying people instantly may tip the scales away from checks.
In envisioning just what the concept of “push” payments means, Edwards said one need only think about how pull payments work. Everyone knows how to walk into a Walmart or go online to Amazon, select a card or payment instrument of their choice and then make a purchase. They trust the payments ecosystem to manage and complete the actual transaction behind the scenes. If there is an exchange of an item or a return, the data flow is simply reversed, and money goes back onto that card.
Push payments, he said, uses those exact same rails and the exact same instruments — but to pay people. Consumers can choose any payment method, such as a debit card, credit card, private label, prepaid, PayPal or other account to receive funds. It’s a familiar transaction for everyone.
The early adopters of push payments, said Edwards, have been “the new economy guys who never issued a [paper] check” and who have digital relationships with their customers, such as Uber. But there is also growing interest from traditional paper check payers like those in the government, health care and insurance sectors. While the technical challenges grow more complex for these issuers, their upside also increases dramatically.
He observed that these companies and banks write almost $23 trillion in checks every year, but the cost of doing so is very expensive. Push payments significantly cut these costs, deliver funds instantly and win customer loyalty.
Consider that the check recipient often didn’t want the check in the first place, he said — they don’t want the hassle of depositing the check, waiting for funds to clear and then possibly having it reversed as much as a month later. Consumers and customers receiving funds via push payments can simply pick one or multiple accounts they hold — Amazon, PayPal, credit card, online wallet — and the money is instantly, irreversibly deposited.
Ingo Money has been a big part of delivering this consumer choice in push payments. The firm doesn’t deal in payment rails, said Edwards; instead they are a gateway focused on building the trusted, global network for push payments. Already, they have partnerships that provide multichannel routing to 4.5 billion accounts via 21 endpoints.
“By joining the networks together, it’s possible to build a ubiquitous push payments solution that delivers complete consumer choice,” he said, noting later in the talk that the real opportunity is to capture the trillions of dollars in checks that will be converted into push payments.
As far as getting corporates to adopt the push model, Edwards said that it is never easy to get a large company to embrace change across the entire entity but that simple APIs can help smooth the transition. In this case, he observed that most companies are already looking for ways to reduce cost and improve the consumer experience, so the larger secular trends are working in favor of push payments adoption.
To make it even easier, Edwards told Webster that Ingo Money has built turnkey, bank-regulated services that provide its clients with secure, compliant and ubiquitous money movement. “We make it easy for companies to adopt, save and earn customer loyalty through push payments.”
The result, he said, is a high level of motivation and demand from a wide range of industries, including InsurTech, FinTech, health care and government. Edwards believes that 2017 is just the beginning and went on to predict that push payments will rapidly become the norm as adoption increases and the benefits become evident.