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Expanding Payments Choice Playbook Shows Digital Shift in Payroll Sector

Expanding Payments Choice Playbook Shows Digital Shift in Payroll Sector

In this era of instant gratification, it’s no surprise that digital payments are becoming more popular every day and that we’re seeing the traditionally stodgy and stuffy financial sector embrace the new way of getting funds from person to person or business to business.

While there were surely a few deep gulps ahead of the move, we’re seeing increased collaboration between FinTechs and traditional payment and banking providers, according to the January 2022 edition of the PYMNTS Expanding Payments Choice Playbook®, a collaboration with Onbe.

“Open finance could significantly reshape financial services in 2022, as there are already 30 partner banks representing hundreds of FinTech relationships and financial services,” the Playbook says.

We’re also seeing digital disbursements and developments gain more traction across the payroll sector. While companies haven’t fully embraced the idea of cloud-based payroll systems, their usage grew to 61% in 2020, up from 34% in 2019. PYMNTS research finds 2 out of every 5 businesses say they plan to modernize their systems by next year.

“Companies must pay wages accurately and on time, as this is crucial to employee retention and motivation,” the January 2022 Playbook says. Digital payroll solutions, our research shows, can eliminate human errors that lead to mistakes that harm employee satisfaction and even result in fines.

“Regulatory risk is a significant motivator for companies looking to move to cloud-based payroll solutions,” according to the Playbook. Almost half of businesses (42%) cited regulatory risk as the primary driver for making the move to a cloud-based structure, while 27% cited cost controls and 19% pointed to a shortage of payroll talent.

Expanding Payments Choice Playbook Shows Digital Shift in Payroll Sector

Elsewhere in the January 2022 edition of PYMNTS’ Expanding Payments Choice Playbook®, we explore how faster disbursements are poised to reverberate across the economy, spur growth and continue to reshape the digital payments space in the years ahead.

“Consumers’ tastes for digital payment methods have expanded during the past two years, and they show no signs of stopping in the year ahead,” the Playbook says. Recent research shows that eWallet usage grew 7% in 2020, and the payment method is expected to account for more than half of all eCommerce payments within two years.

Meanwhile, digital wallet use “has been bolstered by consumers’ perceptions that they are safe and easy to use, and the growth of account-based and QR code-based transactions over card-based payments is expected to further solidify eWallets’ popularity,” our research shows.

Digital payments could also completely transform the insurance sector, according to our Playbook.

“Insurance customers want automated claims processing and instant refunds, and a growing number are unwilling to do businesses with insurers that fall behind on these digital trends,” according to our research.

Almost 30% of consumers — about one-quarter of whom are considered high-income earners — would not purchase traditional, nondigital insurance coverage, according to a recent survey.

“Options that blend digital experiences with event-triggered insurance policies are popular across all generations,” Almost 3 out of 4 millennials (69%), Generation X consumers (64%) and Generation Z consumers (68%) say they would buy digital insurance, while almost 3 out of 5 (58%) baby boomers also said they would be interested in such policies.

“Insurance options that offer features such as digital disbursements are also more likely to help online businesses unlock more revenues,” according to the latest edition of the Playbook.

In fact, consumers are willing to pay 5% to 15% more for insurance that offers exceptional quality and flexibility and almost 7 out of 10 (68%) would switch for flexible cancellation with automated claims.

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