If the government’s COVID stimulus disbursements leave a lasting impression – and they will – it will be on consumer awareness that same-day (and even instant) payment options are now widely available for everything from banks and companies to insurance to online gaming sites.

It will transform payments, although our calligraphy may suffer from no longer writing checks.

PYMNTS ‘fourth annual report in The State of Consumer Disbursements 2021, a collaboration with Ingo Money, found that 17% of disbursements are now instant and 21% through an Automated Clearing House (ACH) on the same day. The writing for 2022 and beyond would appear to be on the wall (or in the wallet).

As Ingo Money CEO Drew Edwards recently told PYMNTS’s Karen Webster, “Who doesn’t want to get paid faster? Same-day ACH was easier to consume, as anyone who did regular ACH could just as easily do same-day ACH. But I always saw it as a stopgap. To get it right, it should be in real time.

It took many years and a global health crisis to pull the financial system out of its old ways. Consumers have led the way, as they have in popularizing peer-to-peer payments, with The State of Consumer Disbursements finding that awareness of same-day and instant options has increased by 50% compared to last year.

Edwards called this change inevitability, but it still faces obstacles.

“One of the big challenges for our business is the process change on the payer side. Going from a batch file on your check printer to a batch file on ACH was easy. To switch to an individual transaction by transaction [application programming interface] integration took a lot more work, but it was always a question of when, not if.

This “when, not if” dynamic has led it to qualify 2022 as “the year in which we will overtake ACH”.

Get the study: The State of Consumer Disbursements 2021

Bloom Instant Disbursement Use Case

The study finding that consumers have made an average of about three disbursements each in the past 12 months, Edwards pointed to “a booming and overheated economy fueled by billions and billions of dollars in government stimulus packages and a almost zero unemployment “. We’re overdrive right now, and there’s a lot of money flowing both ways.

While the government’s stimulus packages have widened the openness for same-day ACH and instant disbursements, its future lies in more common use cases including discounts and guarantees, legal payments, income. investment, gambling gains and the upward trend in early access to wages.

As Edwards told Webster, “We talked many years ago about the future demise of the bi-weekly pay cycle and people being paid every day. It’s gone even further than that in a lot of cases – after every ride, after every delivery in the gig economy, then the whole advent of online gaming in 11 or 12 states. At the heart of [these new use cases] is the payments.

While 71% of survey respondents confirmed that they are offered more payment options today, 66% said they would simply go elsewhere if they did not offer them a choice on the same day. or snapshot.

Checks and cash took a beating, but as a longtime critic of the paper, Edwards was not surprised.

“Remember that a large part of our business [is that] we get paid to convert paper checks into what we would call “good funds”. If you just give someone a check, it’s not just slow, it’s not real money, ”he said. “That’s what everyone forgets. A check is only a promise to pay, not a payment. It has to go through the system, through the bank, and people can change their mind. The check is a risky instrument.

Get the study: The State of Consumer Disbursements 2021

Paying for speed is acceptable to consumers

While paper check disbursements have been cut by about half from 2020 levels, digital wallet disbursements – namely to PayPal – have more than doubled this year.

Edwards supports all forms of fast money movement, but it focuses on real-time payments.

“We too are seeing more and more the adoption of PayPal in our payments and less and less the adoption of checks and less and less the adoption of ACH when we talk about consumers,” he said. declared. “Push to card, growing. Push to PayPal, growing. Push to cash, almost nonexistent, even if we do. Push for checks, generational. We all have ACH, and I don’t have a problem with ACH. In fact, I make the same money on ACH as I do on anything else. But it’s not in real time.

The conversation turned to the survey results that people will pay a fee to get money instantly. This is perhaps the keystone to becoming a real-time and instantaneous business, not just a service.

“If you want a balance, even on the payer side I have cheaper rails that are slower, I’ll give it to you for free,” Edwards said. “If you pay a little, I can get you your money faster.” Eight times out of 10, they’ll pay for speed. I beat that example to death, but we all do it at the ATM.

In the latest State of Consumer Spending study, twice as many consumers said they would pay fees for same-day funds and instant funds, illustrating the speed of the trend.

Saying it’s being driven faster by the odd-job economy, Edwards told Webster, “If you came back to my business for awhile, the people who were paying for speed and certainty were marginal consumers. Think about where we are all today. DoorDash and Uber Eats are getting so much money from me because we’ve all gotten lazy. These are convenience fees.

When it comes to the breakout app that puts an end to slow money, the two agreed that the ‘me-to-me’ trend of individuals moving funds between apps and accounts could be on-the-go. prime time in 2022.

“I think that’s the sleeper use case,” Edwards said. “We have talked a lot about B2C and B2B. Personally, I think “me-to-me” is where a lot of the volume starts to come in, as well as P2P. “

Get the study: The State of Consumer Disbursements 2021



On:More than half of American consumers think biometric authentication methods are faster, more convenient, and more reliable than passwords or PINs, so why are less than 10% using them? PYMNTS, working with Mitek, surveyed more than 2,200 consumers to better define this perception gap from usage and identify ways in which businesses can increase usage.