Why Smart Bets Matter When Deciding How To Innovate In Payments
FROM THE INNOVATION REPORT
Finding 01: Innovating Requires Sharp Focus On Expected Returns
Embedded payment options, like “buy now” buttons that condense the online checkout process, can settle transactions for businesses with a single click. And real-time payments can settle transactions in seconds no matter the day or time. But with this speed and variety comes added cost, complexity and risk, requiring careful management from business leaders pursuing the benefits of payment innovation. “The explosion in the type of payments that can be accepted means businesses, especially large ones, have to rely on multiple systems with multiple providers,” said Ron Shevlin, managing director of fintech research at Cornerstone Advisors, a financial services consultancy. “It’s a huge complexity and requires a lot of people to manage.” Given that complexity and labor tend to raise costs, most executives are firmly focused on the value proposition when deciding how and where to innovate.
of executives said optimizing payment innovation initiatives to achieve the highest possible value for the resources invested is a top organizational priority.
Source: Forbes Insights Survey commissioned by American Express, 2023
68%
Finding 02: Real-Time Processing Shines As Top Cost-Saver
Executives in the American Express survey selected real-time processing as the innovation that leads to the greatest cost savings—and that enthusiasm seems poised to persist. “Payments clear faster, and that reduces reconciliation work on the part of the business,” Shevlin said. “It’s an opportunity to process transactions more easily and more cheaply.” In the American Express survey, contactless payments also emerged as a darling of prudent executives, with three-quarters saying the technology will have a positive impact on their organizations’ cost-effectiveness in the coming years. While consumers appreciate zero-touch payments for the convenience—just hold your payment card, phone or smartwatch near a card reader at checkout—execs like the technology for its ability to streamline collection and improve control over cash flow.
Source: Forbes Insights Survey commissioned by American Express, 2023
of executives said automating fraud detection and response was among the top three steps their organizations are taking to prepare and respond to payment trends.
31%
Given the importance of making sure innovation investments deliver strong returns, organizations may want to consider tightening fraud protection. Effective fraud detection software will flag illegitimate purchases before transactions are completed, preventing chargebacks—and revenue loss—after bogus charges are found. But not even one-third of executives said automating fraud detection and response was among the top three steps their organizations are taking to prepare for and respond to payment trends. Executives seem poised for change, however: Two-thirds said advanced fraud detection and prevention will be the single most important characteristic of future payment environments.
Finding 03: Payment System Success Will Hinge On Fraud Detection
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Source: Forbes Insights Survey commissioned by American Express, 2023
of executives said real-time payment processing has led to the greatest cost savings in their organization, ranking highest among other payment innovations.
46%
What we care about is the ability to use the money immediately. … If we're actually moving the money from system to system immediately, then that's good. We can access that money more rapidly.”
Ron Shevlin Managing Director, Fintech Research, Cornerstone Advisors
