Not long ago, experts were predicting a “digital revolution” in customer payment processing as lockdowns forced businesses to step up their acceptance of digital payments. This shift wasn’t entirely new. Use of electronic funds transfer methods—including credit and debit cards, mobile wallets, ATM and wire transfers, and Automated Clearing House (ACH) payments—had been growing for years. From 2013 to 2022, for example, ACH credit payments grew 75% (from $7.35 billion to $12.88 billion).1
“While we have certainly seen advancements, they’ve fallen short of what I would describe as a digital payment ‘revolution,’” says Christopher Mandozzi, managing director at Truist Securities. He believes that the industry may have overreacted a bit in anticipating that the digital payments transformation would move forward by 10 years but never move back. His evidence? “Just look at some of the largest tech companies in the payments world,” he says. “They were flying high a couple of years ago, but they’ve now started to come back down to earth, as they’ve realized that consumers are not going all-digital at top speed.”
Another proof point from Mandozzi: Retail merchants from gas stations to garden centers can still win over price-sensitive consumers by offering discounts for paying cash.
What that means is that businesses of all sizes may have a little more time to work toward creating a seamless digital payment experience for their clients. Here’s what Mandozzi says business owners may want to know, consider, and do—now.
Implement digital customer onboarding
Creating a digital payment experience—one that works for both your customers and your business—starts with creating a digital customer onboarding process. “By engaging with customers digitally at the very beginning of their relationship with your business, you can eliminate the kinds of manual tasks that frustrate both sides,” says Mandozzi.
The healthcare industry provides a good example of this.
“By engaging with customers digitally at the very beginning of their relationship with your business, you can eliminate the kinds of manual tasks that frustrate both sides.”
Managing Director, Truist Securities
As recently as a few years ago, most patients filled out pages and pages of paper forms when they visited a doctor’s office, sought admission to a hospital, or got their teeth cleaned. Today, many of these onboarding forms are digital: Customers can fill out their information online beforehand or on an electronic tablet after they arrive at the facility. It’s the first step in a whole flow of digital medical transactions, including case notes, insurance filings, prescription orders, test results, and finally patient billing.
In-person grocery shopping is another example of a manual process that’s going digital and making many customers happier with the experience.
Before, onboarding to a grocery store required the business to set up great signage and a thoughtful layout so shoppers pushing a cart up and down the aisles would find the items they needed. Now, onboarding can be highly digital: Helping customers shop online from home or work, schedule pickup, redeem coupon codes, and pay electronically. For the next grocery run, a digital account saves product preferences and payment methods. Even in-person shoppers can benefit: The same website or app that allows for easy online ordering can provide aisle locations for individual items, potentially preventing loss of sales—especially after a redesign moves popular products from one aisle to another.
Cross-industry takeaway: Consider mapping out the customer journey, noting what the digital experience is at each point.
Going beyond traditional payment terminals
Point of sale (POS) systems are no longer just terminals that sit beside the cash registers. They are semi-integrated into the management software system, and they offer touchless and electronic wallet capabilities. “So while we think of these as payment systems, in reality they are management software systems that run the business,” explains Mandozzi.
These systems handle everything from payments to payroll to inventory control, and they even integrate into the business’s accounting software. They truly have become the heart and soul of the business. They also keep track of clients with loyalty programs, ordering histories, and integrations into e-commerce platforms so that inventory can be managed through brick-and-mortar sales as well as e-commerce sales.
This move to make POS systems fully functioning management systems began with the advent of cloud computing. It initially took off in what are considered the most scalable businesses (think restaurant and retail) and the most complex businesses (think healthcare, auto dealerships, and government agencies). However, with time, they are slowly reaching each and every industry vertical.
Cross-industry takeaways: Are your competitors lagging in updates or digital transformation? If you’re involved in M&A transactions, might your new acquisitions have some catching up to do? Making a shift may seem costly but could pay off in efficiency over time.
Digital shifts in the ordering experience
“Restaurants are another industry that has gone through seismic shifts the past few years,” says Mandozzi. “And I’m not just talking about the impact of the pandemic on dining out—I’m talking about the ways that customers interact with restaurants now.”
He asks us to consider the takeout ordering process. Previously, customers just picked up the phone to place their orders, or they walked in and ordered at the counter. Today, there’s been a big shift in the technology restaurants use to interface with takeout customers to enable a true digital transaction, where customers never have to interface with a physical location—even up to and including delivery direct to their door.
QR technology is improving drastically, too. Where they began as more static tools (used by customers to pull up the menu), they have developed into very sophisticated payment tools. QR firms can store the restaurant customers’ credit cards, so these repeat diners can use the same card with any restaurant the firm services. The QR codes can also allow the restaurant to follow a client around in one location by creating zones in the restaurant (bar, dining room, booth area, etc.) and track where each customer tends to sit. The more sophisticated systems can also allow the diners to divide tabs among a table.
At a recent Deluxe Exchange conference for business leaders, QR codes were used to show which attendees participated in various seminars or product venues, thereby earning points. These points could then be traded in for swag at an event “store.”
Cross-industry takeaways: Can you use QR codes at trade shows for prospects to “order” marketing materials or select a freebie? What incentives can you offer your customers for choosing digital interaction with your business? And does encouraging more digital interaction open the way to different configurations of the spaces where your employees work?
Digital communications with customers
“I think this comes down to knowing the demographics of your customers and how they want to engage with your business,” says Mandozzi. “There’s no one-size-fits-all answer.”
In the banking industry, there are fewer bank branches, and today’s customers complete fewer face-to-face transactions with a teller than they used to. But we’re a long way from the elimination of brick-and-mortar bank branches, as some predicted when online banking and banking apps first became popular. Managing money, whether as a household or as a business, is complex enough that digital solutions aren’t available for every need.
What’s more, many clients appreciate options for engaging our financial and business advisory services. This depends on many preferences or parameters, including frequency, complexity of challenges, and medium (in-person, video, or phone).
“Our aim is to meet each customer and each member of a client’s team where they are and how they prefer,” he adds. “And many industries are finding this type of approach can provide an edge over those who are abandoning traditional approaches in favor of digital.”
Cross-industry takeaways: When was the last time you asked your clients and customers how they prefer to do business with you? What frustrates them about dealing with your competition, and how can you do business differently to glue their loyalty?
Your experience, your plans
What will happen in your industry? Will your customers push hard for digital transformation, or will they put on the brakes to slow the rate of change? We’d love to hear what you’re doing and how you’re pivoting so we can bring solutions that can help all our clients navigate this digital evolution.
What digital moves are on your radar or business plan?
Reach out to your Truist relationship manager to discuss possible next steps in digitizing accounts receivable and accounts payable, exploring ACH, expanding digital banking services, and more.