Whether through new point-of-sale hardware or increased adoption of digital wallets, it’s clear that payments are changing. Recently Tearsheet asked fintech experts for their insights and analysis of payments and how the space will change in the coming years. According to Lauren Crossett, Quovo’s Head of Fintech, the fight over interchange fees will drive much of payments’ transformation.
“More merchants, utilities, and vendors are looking for alternatives to credit and debit cards in an attempt to combat high interchange fees. One viable alternative that I’m interested in is ACH-based payment. It is the least costly form of payment from a retailer’s perspective but also the least desirable for most consumers, given the lack of rewards and convenience of a single swipe. However, we should expect to see new workflows implemented using a combination of ACH processing with financial account connectivity.
This method may enable businesses to enhance digital consumer discovery, personalize marketing, and inform their competitive strategy, as the consumer’s financial account is directly connected. In turn, customers could receive similar benefits to credit cards from the special discounts and rewards that merchants may offer to incentivize payment via ACH rails, as opposed to credit or debit cards.”
For insights from other experts, you can read the full text here.