A recent survey from BillingTree, in partnership with American Banker, shows that while bank-deposited paper checks represented the most widely accepted form of payment for lenders, mobile payments were growing in acceptance.
Survey respondents reported that 85 percent accepted bank-deposited paper checks as a form of payment in 2014, with ACH/electronic checks online payments ranked second with 58 percent. Mobile payments were accepted by more than a third of lenders for ACH/e-check payments (35 percent) and more than a quarter accepted mobile debit/credit payments (29 percent).
The size of the organization made a difference on whether or not they accepted mobile payments and different trends emerged between smaller institutions and larger ones.
- Compared to 29 percent for all respondents, close to 19 percent of small lenders (less than $250 million) accepted mobile debit card payments versus almost 43 percent for the largest lenders (more than $5 billion).
- Compared to 35 percent for all respondents, only 26 percent of small lenders accepted mobile ACH/electronic check payment versus 46 percent for the largest lenders.
- Compared to 16 percent for all respondents, only 7.5 percent of small lenders accepted text-based debit card payments versus 27 percent for the largest lenders.
- Compared to 22 percent for all respondents, only 10 percent of small lenders accepted text-based ACH/electronic check payments versus 36.5 percent for the largest lenders.
When it comes to technology adoption, consumer lenders responded that there remains room for further optimization, and that, in the case of mobile, they have aggressive plans to adopt sooner than later. Overall, consumer lender responses indicated that technology adoption was viewed as part of a broader business strategy focused on greater efficiency and reduced costs.
Today, mid-to-large-sized lenders hold an edge when it comes to the breadth of payment and technology offerings to serve their clients, but that advantage may be short-lived. Even the smallest lenders in the survey expressed plans to further automate their operations. Considering the demand for mobile offerings, there may even be an opportunity for some smaller firms to leapfrog larger competitors.
BillingTree conducted the survey of lending institutions in the U.S. The purpose of the survey was to understand the usage of payment technology solutions and the priorities of decision-making consumer lending professionals. As the industry navigates a shifting business and regulatory environment, survey results will help to establish a benchmark to examine trends year-over-year. To read more of the survey results, you can access the entire report, 2015 Consumer Finance Business Strategy and Technology Survey here.