Three Industries Poised for Payments Innovation

A continued drive toward technological innovation is facing organizations who are ready and willing to take advantage of the opportunities available to them. In spite of challenges, a new study by research house Ovum has found not only that those who adapt and innovate quickly will benefit the most long-term, but also that more and more organizations are seeing increased payments competition.

According to the Global Payment Insight Survey, changing touchpoints, regulations, behaviors and more are creating an opportunity for innovation in payments technology as well as for the organizations that invest in the most effective technology.

But which industries are poised for the most innovation—especially when it comes to billing and accepting payments? Healthcare, Insurance, and higher education.

The study found that these industries were facing a good deal of expected competition, but, more importantly, were more flexible than other industries—ready to move beyond legacy systems and find new, innovative payments solutions.

As 65% of all organizations studied were seeing increased competition, healthcare providers led the way, with over eight in ten agreeing with the statement, “my organization’s payment services face growing competition.” For insurance and higher education, the numbers were lower at 58% and 60%, respectively, but when looked at from a flexibility- and readiness-standpoint, all three of these industries excelled.

From the survey:

Many organizations lack confidence in their ability to innovate, with a majority in most segments reporting they are not flexible enough to handle new payments innovation. Payments are increasingly shifting away from purely a functional means to an end and towards being a critical tool in broader customer engagement strategies. As a result, organizations that are able to enable payments innovation now will gain a considerable competitive advantage.

Noting this, insurance was the most flexible and ready for innovation, with just over half reporting they had the capabilities to move beyond legacy payments systems, followed by 50% of healthcare providers and 40% of respondents in higher education.

All three of these industries have seen a shift in regulation in the past decade, but have also made strides to prepare themselves for more innovative payments. The study goes on to show that across all industries, companies are moving away from laborious paper-based processes like cash (down from 76% to 51% YOY) and check (down from 68% to 65%), rapidly adapting ACH, Direct Debit, and Online Payment Providers.

Looking forward, the study found that organizations are looking toward reducing payment friction, improving customer focus, marketing and security:

• eBilling: 69% of all organizations already offer, 11% more have in development.
• Mobile Payments: 41% of all organizations already offer, 21% more have in development.
• Real Time Confirmation of Funds: 28% of all organizations already offer, 20% more have in development.
• Targeted Customer Rewards: 41% of all organizations already offer, 13% more have in development.
• Biometric Authentication: 25% of all organizations already offer, 24% more have in development.

With payments costs on the rise, it pays to innovate, now more than ever, as only 9% saw a decrease in the cost of payments. Those who do innovate place themselves in a good position to thrive, exceed competition and lower costs in the short term and long run.

For more information on how to improve your payments strategy in higher education, healthcare, or insurance, see the following resources:

• Higher Education: Streamlining Payables in Higher Education
• Healthcare Providers:  Tomorrow’s Healthcare Payments, Part 1: Understanding Today’s Limitations, Part 2: Exploring New Forms of Automation
• Healthcare: 3 Reasons the Mobile Revolution is Flourishing in the World of Healthcare Payments