A new study from Carat indicates that older and retired Americans are more likely to prioritize security, and millennials prioritize the speed of payment delivery in digital payment preferences.
Robert Clayton, VP of Carat Digital Payouts at Fiserv, wants to share more on the recent Carat research and how digital payouts may evolve further in 2023.
Carat, the market brand of their corporate enterprise offering owned by Fiserv, polled 2,200 U.S. adults this past summer. The study was done to understand how consumer perceptions and viewpoints vary across industries and demographics.
Digital payouts move funds from a business to a consumer quickly. Consumer expectation is to receive money faster, and businesses with high volumes of B2C payments jumping on board.
He says, “the overall volume of B2C payments is growing at a double-digit rate every year, without the involvement of Fiserv, Carat, and the kind of things we do other companies that do similar things, organically the market for this type of payout is growing in double digits.”
What options do consumers have when it comes to digital payouts?
- Bank transfer- direct deposit (most preferred)
- Pay to a debit card
- Pay a digital check
- PayPal account
- Venmo account
- Pay to a Coinbase wallet
- Pay to their own Fiserv money network card
From the study, Carat found older and retired Americans are more likely to prioritize security (40%), and millennials prioritize the speed of payment delivery (29%). Older adults have spent their lives only receiving physical checks as payouts, so moving money to them in real-time may be much more appealing. Likewise, for young adults, receiving funds digitally fits their real-world expectations for moving money quickly. However, both want convenience and choice.
Robert Clayton says for 2023, “some of the biggest things we have going right now is we’re working on globalizing our offering, that’s supposed to wrap up in the first quarter of next year. Today we are pretty much a US company; US consumer, by the time we finish early next year, we’ll have unlocked on the order of thirty-five to forty countries”.
Payouts have been successful in insurance claims (38%), company owners when paying payroll, and gaming companies (29%).
Also, anyone who works as a Lyft driver or a waiter and can “tip out” at the end of their shift or someone even selling goods across marketplaces can get paid now. For merchants, offering multiple payout options makes meeting each customer’s needs easier, especially when managing their funds.
Carat working with merchants who offer B2C payout options increases customer fulfillment and saves money. According to Carats data, digital payouts are up to 60% less expensive than traditional checks and wires, and digital payouts can drive up to a 25% reduction in payment status inquiries.
Same-day funding is growing. The instant payout for a small business accelerates the funding cycle and removes the need for a business owner to wait 2-3 days to receive funds from credit card receivables.
Have there been any issues with Carat’s digital payouts?
“It’s been very successful. Fraudsters can abuse this type of functionality. Our second wave of success is integrating our data and fraud detection tools into this product to help our customers be confident that they are paying the right person. We’ve helped several companies knock down sophisticated fraud rings that have tried to take advantage of this capability.”
“We’ve concluded that traditional methods and data sources like credit bureau data really don’t suffice. We are going to things like device identity and much more advanced digital techniques to build an identity that looks either consistent to us or inconsistent to us. In other words, we’ll block the payment,” said the VP of Carat Digital Payouts, Fiserv.