Considering the dizzying array of technologies that have swept through the payments industry during the last five years, payment professionals are engaged and eager to learn. That’s the top-line conclusion of Managing Payment Technology Innovation, a study conducted by Capital One and the NAPCP, the professional association of the commercial card and payment industry.
As a group, payment professionals are both knowledgeable and enthusiastic about the many advantages that new technologies offer. When asked about the benefits leading them to consider new technologies, the 136 respondents, representing a broad range of public and private organizations, cited the heightened administrative efficiency as the advantage that appealed to them most. They valued a range of other benefits almost as much: reduced process costs, end-to-end procurement transparency, the ability to automate AP/AR processes, enhanced back-end/post-transaction analytics, and faster processing speed. In fact, they gave all these benefits a 7.78 or more on a priority scale of one to 10.
Seeing New Payments Technology Through the Lens of Experience
Their enthusiasm for these technologies, however, is tempered by a realistic appraisal of the administrative and organizational challenges in adopting them. Every veteran payment professional knows from hard experience that unanticipated costs and systems incompatibilities can undermine even the most promising of technology. And they are leery, too, of the time-consuming training required to master the unintuitive user interfaces that are sometimes features of custom-built solutions.
Payment professionals also understand that organizational inertia can slow the momentum behind any campaign to adopt new technology. The study found that leaders — at the C-suite or director level — are much more optimistic about their organization’s embrace of new technology than program administrators and managers. Leaders are much more likely to declare that their organizations want to be ahead of the curve and use innovative payment technologies as a competitive advantage. And the survey revealed that in such fields as healthcare/pharmaceuticals, educational services, transportation, and utilities, leaders have indeed pushed their organizations to the forefront of change.
Perhaps because they are on the front lines of implementing change, program administrators and managers have a different impression. A significant percentage of them are skeptical about their organizations’ capacity for change, citing such barriers as rigid bureaucratic structures and regulatory and compliance requirements. Having encountered resistance in the past, they feel that staying up to date with the latest technologies is just one among many priorities competing for organizational resources.
Knowledge of New Technologies Is Uneven
Capital One and NAPCP used the survey as an occasion to take a closer look at a sampling of the new financial technologies and products – ePayables, EMV chip cards, tokenization and blockchain. The familiarity of payment professionals with these different technologies and products varies considerably.
By and large payment professionals are enthusiastic about ePayables. Thirty-eight percent of respondents said their organizations had implemented them and more than a third of the rest said their organizations were considering adding this payment method in the future.
An important reason for the acceptance of ePayables is the widespread appreciation of its benefits. The ePayables adopters in the survey identified all the classic arguments for implementation, starting with simplifying payments processes and earning revenue share and/or rewards.
EMV chip cards have also begun to see rapid acceptance—and here too payment professionals understand the power of the technology to reduce identity theft and fraud. In contrast to ePayables, however, payment professionals are largely unengaged with the technology, seeing chip cards as an innovation being advanced by credit card companies. In the case of ePayables, it is the payment professionals themselves who are driving the transition.
Payment professionals are much less familiar with the two new and relatively complex technologies in the survey: tokenization and blockchain. Although two-thirds know about blockchain, only 17 percent are familiar with blockchain applications. Even fewer, just over 13 percent, have heard of tokenization, and only two reported that their organizations had implemented tokenization. Although uninformed, they are not indifferent. The clear majority of respondents expressed their eagerness to learn more.
Industry Associations and Payment Providers Must Step Up
The overall impression generated by the survey is that payment professionals are intrigued by the new technologies and willing to adopt them when they understand their benefits, but they lack the knowledge and resources to advocate for them effectively. The survey points to two recommendations — one for industry associations and the other for payment providers — that can help payment professionals overcome these barriers.
Industry associations are ideally placed to bridge the information gap. More than 78 percent of respondents reported that their organizations send professionals to industry events and conferences, and more than 55 percent said their organizations send professionals to continuing education conferences. Industry associations can inform payment professionals about emerging payment technologies. And they can also educate decision-makers about the value of new technologies.
Payment providers also have a role to play. They must do more than build solutions that incorporate the latest payment technology. They should also concentrate on making these solutions more user-friendly. Human-centered design, natural language search, and application programming interfaces are just some of the approaches they can use to make their products easier to use and reduce the costs of implementation.
At the same time, given the accelerated pace of innovation in payment technologies, payment providers have an opportunity to recast themselves as strategic partners, offering ongoing guidance and education to organizations trying to make sense of the new technologies.
Matching the Pace of Innovation
The powerful new payment technologies emerging today have the potential to dramatically transform the way organizations manage their purchasing and payment strategy. For those with the vision and determination to implement them, new technologies will lead to unprecedented reductions in costs, vast improvements in efficiency, and levels of security that are otherwise unattainable.
Industry associations and payment providers can help their members and customers make the most of these advances. Industry associations can find ever more effective forums to disseminate information on new payment technologies, and payment providers can remove obstacles to implementation and help organizations make more informed choices.
The challenge for organizations is to match the pace of implementation to the pace of payments innovation. With no end in sight to the introduction of new payment technologies, the contributions of industry association and payment providers will be ever-more important.