Payments technology has advanced rapidly in the past two years, driven largely by a dramatic shift in how consumers interact with technology. And consumers will continue to drive innovation, even in other areas of the payments system, experts said at American Banker's Payments Forum in Phoenix.
One of the most important roles for future payment tools is their ability to act like a connective tissue, ensuring reliability and the availability of money movement, according to Aleksandra Teichman, head of acquiring, business development and strategy for Cross River Bank.
"The word I use the most is ubiquity," Teichman said. "We talk about RTP and FedNow and all of those rails, but really at the core it comes down to: How do I do it in a way where I'm solving a problem for a customer?"
The pandemic accelerated the migration toward digital payments, e-commerce and faster processing. Teichman, one of American Banker’s Most Influential Women in Payments for 2022, joined other honorees in a discussion Monday on technology advancements. She stressed the importance of determining how consumers and businesses should trust the performance of any new form of payment that gets introduced.
The growth of broader consumer technology has created higher expectations about the speed and reliability of payments and other financial services. To meet this demand there must be further automation in business payments, which still lags consumer payments, according to Kristy Carstensen, chief financial officer for payments at U.S. Bancorp, who noted that a large portion of business payments still are made via checks.
There's an increasing movement toward bringing elements of consumer payment technology to other categories such as business payments, Carstensen said.
This year's Most Influential Women in Payments honorees span the globe, demonstrating the universal importance of personal connections and career mobility, as well as the ways technology can connect a hybrid workforce and propel commerce.
"There has been a consumerization of payments," said Carstensen. "How many times do you pull out your phone to make a payment? [You're] probably not paying via a check."
How new payments technology is adopted has also changed, according to Rosemary Stack, senior vice president of enterprise payments for Bank of America.
"Whenever some new thing would come into the payments in the past, the early adopters would come in and want to try it," Stack said. In the more traditional technology environment, people would try a new innovation and then share their experiences with others, contributing to broader adoption over time.
"During the pandemic some people were cut off from their options. You couldn't make a deposit or use case," Stack said. That urgency creates a greater early market for innovation, she said. And that pushes an innovation road map that takes a larger set of users' needs into consideration at the onset.
To help keep pace with new payment innovation and how it fits into real-life challenges customers are experiencing, Umpqua Bank has formed a payments innovation group that regularly convenes to consider how advancements in payments technology match current needs. "We talk about the development of digital currencies, crypto, FedNow, [new mobile pay standards], prioritizing where to place the next bets," said Kaythryn Albright, executive vice president of global payments and deposits at Umpqua.
Connected commerce, which refers to an integration of online and offline shopping and payment options that places more choice in the hands of the customer, will become an important concept in the future as different payment types evolve, according to Teichman.
"That is going to become much more prevalent as we go down this path, ensuring that wherever the customer is you can meet them and connect all of the different points in which you are interacting with them," Teichman said.
