Consumers are demanding faster and more secure payment solutions in today’s environment while consumer preferences are changing everyday, the ongoing Covid-19 pandemic has also led to a shift in what businesses and consumers need more of to tide through the current business challenges. Curtis Webb from Meta Financial Group / MetaBank joins us in this interview to have a quick chat on these evolving trends.
Can you tell us a little about yourself Curtis? What’s a typical day at work like for you at MetaBank, especially now, given the current Covid-19 pandemic crisis?
MetaBank is one of the largest issuers of prepaid cards in the U.S., having issued more than a billion cards in partnership with banks, program managers, payments providers and other businesses. We also offer a total payments services solution that includes ACH origination, wire transfers and more.
I am responsible for the development, management and growth of many of the company’s emerging payments products. I focus on the acquiring part of our business, including faster payments for disbursements and person-to-person payments. I have been in this position for two years. Prior to joining MetaBank, I served in a variety of leadership roles at Citi and Mastercard. I am also a licensed private pilot and enjoy flying in my spare time.
Given the strategic, long-term nature of the initiatives my team manages, our day-to-day work has not changed drastically due to Covid-19. We are still focused on providing our partners and their clients with innovative products to serve consumers. Of course, what has changed is how we do our work. I used to spend almost half of my time traveling to visit partners, networks and other industry stakeholders. Like the rest of the world, we are conducting our business virtually for now using video conferencing and other tools. These tools have been effective, perhaps even better in some ways, for collaborating and building relationships.
Given the ongoing pandemic, what top thoughts do you have for the way contactless payments and cards as well as other digital payments are being forced to evolve to meet new demands and needs?
Since the Covid-19 outbreak, things have changed rapidly in the payments industry. The biggest trend we have seen is obviously a shift to contactless digital payments. There are likely several reasons for this, as we have been thrown into a low-touch environment.
Early on, it was because many feared cash could spread the virus. As the outbreak progressed and many were under stay-at-home or social distancing orders, digital payments were simply a safer, more convenient solution. Right now, it may make more sense to order an item online you would traditionally buy with cash in-store, or to arrange to purchase your takeout in advance electronically. Many businesses are also switching from checks to digital options for business-to-business and business-to-consumer transactions. This move has a variety of benefits, both today and in more normal times.
For federal disbursements, the pandemic has forced us to truly think through how we can get money quickly to people who need it, in a way that eliminates latency. More than 8 million U.S. households were unbanked as of 2017, according to the FDIC. These households are often among the poorest. When it came to distributing Economic Impact Payments to those who needed them the most, prepaid debit cards offered a great alternative to checks — stimulus payments can be loaded onto prepaid debit cards, and consumers can access their funds quickly.
Read More: The Rise of Contactless Payments
Given the ongoing pandemic and its effects, how according to you will the need and demand for other innovative payment solutions now become a priority for both business (manufacturing/industries/others) and individual users? What are the top features/applications that businesses will need more of, over time?
In the payments industry, the shift to contactless, digital disbursements was already in progress pre-pandemic. Consumers have been telling us for a long time that they are frustrated with friction and latency in the payments ecosystem. Pre-pandemic, we released research titled Faster Payments: What Consumers Want from Businesses in 2019, and one of the key findings was that consumers want seamless, instant options to spend, receive and move money. What the pandemic has done is brought some key value points around this to the forefront, like the safety and contactless elements of digital payments. For these reasons, I expect that those in financial services will re-prioritize digital, low-touch solutions if they have not already, and that consumer adoption will continue to ramp up, too.
Covid-19 has also led to an increase in e-commerce. One thing we were seeing pre-pandemic was that, thanks to value-driven, mobile-first user experiences, consumers were interested in banking contextually. They are interested in staying within the technology or e-commerce ecosystems they are already in, for example P2P apps or social media platforms. This creates an opportunity for technology companies and brands to start offering their own debit products that will create seamlessly integrated user experiences and deepen customer relationships. As more and more people continue to leverage e-commerce in their day-to-day lives, we expect more platforms will consider offering their own debit products.
MetaBank conducted a research on consumer demand for faster payments. What were the top findings in this research, and why is important, particularly now?
In August 2019, we released Faster Payments: What Consumers Want from Businesses, which examined consumer preferences for receiving payments from businesses. Though the research was conducted before the pandemic, it found several key statistics that are extremely relevant in today’s climate as businesses look to stay relevant and thrive:
- First, consumers are demanding faster payments. As our culture becomes more and more on-demand, payment methods like PayPal, Venmo and Zelle are exploding in popularity. With this trend comes a growing consumer demand to receive payments from businesses more quickly — something our study confirmed.
- Consumer preferences come down to convenience, speed and security. Among survey respondents, direct deposit was the number one preferred way to receive funds from a business.
- Finally, businesses need to consider digital faster payments just to keep up. Our research found that faster payments have a direct impact on customer retention and loyalty. And speed matters. Nearly two in five respondents would be more willing to provide repeat business to a company that offers a direct deposit option they would receive within a few days — that increases nearly 10% for direct deposit options available in minutes.
How will the effects of the pandemic impact new innovations in the fintech segment on the whole (banking/etc)? What top features/platforms will fintech entrepreneurs have to innovate on to provide the user base?
Again, many of the payments industry evolutions we have seen in response to Covid-19 were already in progress; the pandemic has simply accelerated them. There are several key trends we have been monitoring for a while now that apply here — for instance, the rise of the gig economy, corporations going digital with their payments to reduce cost, opportunities for businesses to leverage payments to increase customer retention and more.
Gig economy workers are the fastest-growing segment of the American workforce, and research shows they are expected to comprise half of all workers within a decade. With this, fewer workers get one paycheck from one employer at a set cadence, but rather are earning from multiple platforms and are demanding to be paid for their work as they earn money. Though it is not a new innovation, debit can be leveraged to allow for immediate access to earned wages and cost-savings benefits.
Corporations are starting to realize they can go digital to reduce cost — the cost of checks can add up very quickly. Just one can cost a business up to $20 to print, mail, and manage inevitable exceptions. As more and more companies realize this, electronic payment innovations will become increasingly important.
Finally, as we noted, our research Faster Payments: What Consumers Want from Businesses in 2019 showed faster payments are a driver of customer retention and loyalty. The research showed speed matters for this, too — anything that can be done to make these payments even faster or more convenient for the consumer could be huge. Consumers are even willing to pay a small fee to receive their payment faster, especially when time is of the essence.
What are some of your thoughts on the impact of emerging technologies on the growth and development of future fintech platforms?
Consumers need to make payments and they need to be paid. The same is true for businesses, governments and nonprofits. Fintech platforms have been and will continue to add value to these transactions in ways that are difficult for an individual bank or card network to do alone. For example, offering new personal financial management tools to view balances and activities across multiple accounts.
I also expect that there will be a heavy amount of collaboration between fintechs and others in the industry. For instance, emerging payment technologies can complement future fintech platform innovations. For example, using machine learning, a fintech can identify opportunities to increase return on savings by moving funds from one bank account to another. With the consumer’s consent and bank sponsorship, the fintech can use new technologies to initiate an account-to-account transfer to move the money within minutes.
Whether we are talking about disbursements, account-to-account transfers, or person-to-person payments, fintechs (in partnership with card networks and banks) can use new emerging technologies to continue to innovate for their clients and end consumers.
Tag (mention/write about) the one person in the fintech industry whose answers to these questions you would love to read!
Benjamin Schmitt is VP of Product at Dwolla. Ben is a great guy, good friend and product leader launching innovative programs for Dwolla’s clients. Dwolla offers a secure, scalable and reliable way for businesses to move money. Their payments API is developer-friendly and easily integrates with a merchant’s application.
Your favorite FinanceTech quote
One of my favorite quotes is from our President and CEO Brad Hanson. “Build something different, building something unique and build something that can help other people.” At MetaBank, we are focused on delivering financial services products that create inclusion for everyone, including the unbanked and underbanked. Many of our partners are innovative leaders building different and unique solutions to help their businesses and end consumers.
Would you like to share specific finance or business tips for Marketing and Sales teams struggling through this uncertain time?
A business tip I would offer is to focus on solving problems and latent customer needs. In our new post-Covid “normal,” many of the needs businesses and consumers have related to core payments infrastructure remain the same. In fact, Covid may have heightened awareness of these needs. The channels, tactics and methods will have changed a bit but the needs remain the same.
Spend time to understand how your customers are doing business differently and then adjust your strategy. Your customers still need to make payments and get paid. Aligning your efforts around those needs should position your organization to prosper post-Covid.
Meta Payment Systems (a division of MetaBank) is an innovative payments provider. Meta enables clients to grow their businesses and build more profitable customer relationships by creating, delivering and sponsoring payment solutions that bring money to LIFE.
Curtis Webb is the vice president of emerging payments product management at a Meta Financial Group and MetaBank, N.A. MetaBank is one of the largest issuers of prepaid cards in the U.S., having issued more than a billion cards in partnership with banks, program managers, payments providers and other businesses. Curtis is responsible for the development, management and growth of many of the company’s emerging payments products and innovation functions. His areas of focus include tokenization, bill payments and faster payments, including disbursements and person-to-person payments. In the past, Curtis served in a variety of product management leadership roles at Citi and Mastercard. Curtis holds a Master of Business Administration from Northeastern University and a Bachelor of Science in Management from Saint Francis University. Curtis is also a licensed Private Pilot with the Federal Aviation Administration.