The Covid-19 pandemic has had a number of effects on our daily lives, but none more so than the accelerated digitalisation of payment services. With cash payments being discouraged due to social distancing measures, alternative payment methods have seen a particular boom that could spell the end of cash forever.
Someone who knows all about this is Michael Kaplan, Chief Revenue Officer and General Manager at PayNearMe, a payments platform that lets customers pay how they want. Michael is a seasoned executive in the payments, fintech, pre-paid and mobile markets with significant experience in growing and scaling start-up companies.
Here Michael shares his thoughts on how digital wallets are transforming bill payments.
Payments are changing rapidly, what solutions is your company introducing, particularly regarding digital wallets?
The term “digital wallet” is used in a number of ways right now. It can refer to your Apple Wallet or Google Wallet, where you store things like digital concert tickets or your boarding pass. It can also refer to pay-focused wallets like Apple Pay, Google Pay or Amazon Pay, which work in tandem with a credit or debit card. Or, it can be a type of wallet that stores value, which you then can use to pay for items – think Venmo or PayPal.
PayNearMe is taking digital wallets to the next level by allowing consumers to pay their bills in the same way they make e-commerce payments. We integrate into the digital wallet a card specific to each biller that tells customers exactly what they owe and when their next payment is due. The customer simply clicks the link for that bill, chooses how he or she wants to pay from the list of methods approved by the biller (credit, debit, ACH, etc.), and approves the transaction.
As you can imagine, this service saves time and hassle for both the customer and biller. The customer no longer has to log into accounts online, remember passwords or enter any identifying information. The biller, in turn, benefits through fewer missed payments, because it is now easy for customers to pay their bills on time, no matter where they are. The biller can even send payment reminders, so their customers don’t have to keep track of when the bill is due.
How can digital wallets develop further to meet diverse consumer needs?
Consumers are now accustomed to using the same digital wallet for various payment tasks, so both merchants and payment platforms must adapt to meet customers where they are.
Billers should provide customers with all the information required to manage their payments (amount due, due date, etc.) so they never have to leave the wallet to accomplish their task. Everything is at their fingertips. Payment platforms like PayNearMe can support merchant clients by offering the ability to configure digital wallets in this way.
Another effort at PayNearMe is to forge relationships with more payment service companies so we can allow all users of our platform to pay bills when, where and how they want. Ideally, this would include anywhere the customer stores value.
One really exciting example of that is PayNearMe’s remote cash payment option. If a customer wants or needs to pay a bill with cash, that individual can head to a participating retailer, like many 7-Eleven and CVS Pharmacy stores. The payer asks the cashier to scan a barcode on his or her phone, pays the cashier the money, and gets a receipt showing payment. It’s a very easy and convenient option for the large number of consumers who prefer paying with cash, and they can do it remotely as a type of digital wallet transaction.
Do you believe a cashless economy could be fairer, more secure and inclusive?
I don’t see cash going away any time soon. The reality is that cash is still quite dominant among a large segment of the population who are unbanked or underbanked. They either cannot afford the costs and fees associated with today’s banks and credit cards, or they don’t qualify for an account for various reasons. If you carry that forward, you can imagine that those without a bank account have difficulty participating in cashless transactions. And without a credit or debit card, it is much harder to use Apple Pay, PayPal or Venmo. That leads to less inclusivity and less fairness.
As for security, cashless can be more secure because there’s a record for every transaction, but it also can expose consumers to other vulnerabilities that cash doesn’t have – like data breaches, for instance.
At PayNearMe, we’re committed to helping create more digital bill pay solutions to meet every customer’s preference, including cash. I think that’s still what billers want too.
Finally, what do you think is the future for digital wallets?
I predict that the use of digital wallets will continue to grow steadily in the next decade, and one reason for that relates to bill pay. Yes, some people already pay for groceries or shop online with their Google or Apple Pay accounts – it’s a bit of a novelty, and it’s relatively convenient. But it’s when consumers start paying bills through the digital wallet that they will fully appreciate it for the enormous ease and time savings it gives them. As they pay their bills month after month and click on that “Add to Wallet” button, they will become more and more comfortable with that process and more likely to use it for all their money-related tasks. All of us in fintech should be seeking ways to enable digital wallet usage to take advantage of this important trend.