Welcome to this week's edition of "Innovating Payments News: Weekly Top 3," where it's all about payments digitization. From accelerated B2B payment digitization to Zelle's evolution into "digital cash," a phrase dubbed by Albert Ko, CEO of parent company Early Warning in this week's headlines, digitization is on the rise. Balancing out this week's digitization headlines, we hear from PayPal, which announced it will lift merchant costs for its branded payment products while cutting those for behind-the-scenes processing of some Visa and Mastercard transactions.
Read on for this week's top headlines.
1. Report: Remote Deposit Capture Paves Path for B2B Payments Digitization (PYMNTS)
Public health and safety guidelines have forced many businesses to abandon their brick-and-mortar offices and in-person payment processes in favor of digital channels over the past year. These changes have included significant shifts in how many companies make their business-to-business (B2B) payments, with more firms moving to electronic payment methods such as automated clearing house (ACH) transfers to reduce payment frictions. Many firms have accelerated their existing B2B payment digitization plans in recent months, adopting electronic invoices and other virtual tools as part of their accounts payable (AP) and accounts receivable (AR) processes. Read more.
2. PayPal: Overhauls U.S. Rates as Payments Rivalry Heats Up (Reuters)
PayPal Holdings Inc. will lift merchant costs for its branded payment products while cutting those for behind-the-scenes processing of some Visa and Mastercard transactions, a bold move in an increasingly competitive digital payments sector. The strategic shift reflects PayPal's growing power in online transactions, which surged during the COVID-19 pandemic. As consumers and businesses flocked to the company, a market leader, during lockdown, its active accounts mounted to 377 million, more than twice as many as in 2015. Read more.
3. Zelle Stretches Far Past P2P Payments to "Digital Cash" Role (The Financial Brand)
Zelle has become more than the person-to-person payment service it set out to be when it launched in 2016. In fact, Albert Ko, CEO of parent Early Warning, says he believes that Zelle has evolved into "digital cash." Ko notes that the bank-owned company now processes transactions for small businesses and handles disbursements for companies, government entities and nonprofits, which is far beyond handling payments to babysitters and facilitating the splitting of dinner tabs. To Ko, that growing ubiquity of the Zelle platform implies an increasing resemblance to the acceptability of actual cash. Read more
What is your financial institution's payments digitization plan? What changes is your organization making to adapt to and evolve with the industry? We invite you to share your thoughts with us so we can better support you in achieving your goals.
AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.