The 3 Things Every Successful Payments Method Must Have

The view may be better from the edge, but the experience is richer at the center.

And for end-users, that is truer than ever when it comes to payments.

“The one thing I get asked by execs at financial institutions is, ‘How do I get to be the center of my customers’ payment activity?’” Ron Bergamesca, general manager of Banking and FinTech Solutions at Paymentus, told PYMNTS as part of the new “One Thing” series.

Incumbent financial institutions (FIs) now only account for about 25% of all payments, a situation that is only growing as more customers turn to billers or FinTechs for their payment needs, explained Bergamesca.

The evolving role of financial institutions in their customers’ payment activities has prompted FIs to recognize and move to embrace the importance of providing effective money management tools and other solutions to their customers that can ultimately lead to better financial health and drive retention.

“Successful payment offerings have three key attributes,” Bergamesca said. “They need to be comprehensive, they need to be easy to use, and they have to be fast.”

Being comprehensive means that the solution should be capable of handling a wide range of payment activities, including bill payments, money transfers, individual payments and account funding. Moreover, flexibility in payment methods, such as debit, credit, ACH and digital wallets, is crucial, explained Bergamesca.

Simplifying the payments process for consumers and reducing process bottlenecks like providing multiple details are also top priorities.

“You only want to burden the consumer with four asks: amount, account, recipient and receipt,” added Bergamesca.

Fast payment processing, with real-time money movement as the ultimate goal, is another critical factor in meeting customer expectations.

Business Is Better as the Central Hub of Payment Activities

As the payments landscape continues to evolve, there has emerged an increasing need for payment providers to have access to a comprehensive direct biller network and modern technical infrastructure to facilitate efficient transactions.

A payment provider’s underlying platform technology and architecture have never been more important as the world becomes more digitized and behavioral expectations are entirely transformed.

“If you’re going to compete not only today, but in the future, and continuous innovation is an important part of that — then underlying technology that is modern, flexible and open is something you need,” Bergamesca said. “… If you’re relying on a provider with dated and siloed technology, you have a tough road ahead if you’re looking to provide a good user experience.”

“By definition, you can’t provide a great user experience …with outdated technology,” he added, noting the inflexibility and expense of updating legacy platforms. “It’s time-consuming, and integrations are hyper-inefficient.”

And as new payment rails such as real-time payments and the FedNow platform emerge, seamless integration into a holistically designed platform becomes imperative.

The Importance of Taking a Holistic View of the User Experience

“An important change has happened around a recognition of the platform and its ability to integrate,” Bergamesca said, explaining that “foundational technology is the kernel that everything hangs off of.”

In the past, FIs often implemented point solutions for new features and functions, resulting in a disjointed and complex experience for both customers and staff.

“[Firms] have to rely on partners or other technology providers to innovate,” he added. “And what’s critical is to do it with a holistic view of the user experience, so that when technology is integrated, it’s not a bolt-on [solution].”

Asked what he sees the future holding, Bergamesca said that if he were running an FI, he would be thinking about, “How do I integrate my financial institution more seamlessly into the lifestyle of the customer?”

He explained that tokenization offers a way for FIs to do this.

“We have to be looking at what the digitally native consumers want and expect and experience elsewhere,” Bergamesca said. “And I look at tokenization being that key to portability and integrating the FI more into the consumer’s lifestyle.”

To succeed tomorrow, organizations need to adapt to the changing payment trends and technologies of today while at the same time considering the holistic user experience and ensuring that any underlying technical architecture can support any upcoming future-fit integrations and innovations.