Shift in Payment Methods Predicted
Financial Insights has announced the results of a consumer survey of over 1,000 U.S. adults revealing their usage of a variety of new and emerging payment methods - finding a downward shift in the use of closed-loop (single merchant) gift cards, a shift to open-loop (multi merchant) gift cards, the rapid adoption of online payment security systems, and the decline in the influence of rewards programs in card usage outside of a niche demographic.
The report discusses new developments; in particular, consolidator bill payment overtook biller direct in total number of users (although probably not yet in total number of bills paid). And Financial Insights recommends that core processors and outsourcers should continue to invest in prepaid cards, particularly gift cards, incentive cards (which also showed good usage, with 30.6% participation), payroll cards, and benefit cards. Core processors are in a uniquely strong position with regard to health benefit cards because they can spread the costs of developing relationships with pharmacies and benefit administrators over all of their financial institution clients. All of these prepaid products are poised for rapid growth."The results of this survey defy conventional wisdom in several respects, compelling financial institutions, vendors, and merchants to reconsider their investment strategies," states Aaron McPherson, research director, Payments. McPherson also suggest that online merchants that do not support Verified by Visa or MasterCard SecureCode should seriously reconsider their position as the technology has drastically improved over the past three years and is less disruptive to the sales process.
Aaron McPherson, research director, Payments, Dana Gould, senior analyst, Payments, and Maggie Scarborough, research manager, Corporate Banking will be presenting and attending the upcoming Payments 2007 conference on April 15-18 in Chicago.
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