The PaymentsJournal Podcast

The payments industry has undergone more change in the past few years than it has in the preceding few decades. The rise of instant payments, the arrival of fintechs, the consumerization of payments, and the onset of open banking have driven significant shifts in the business payments terrain.

In a recent PaymentsJournal podcast, James Richardson, Head of Global Product Solutions at Bottomline, and Albert Bodine, Director of Commercial and Enterprise Payments at Javelin Strategy & Research, discussed how businesses can revolutionize the way they pay and get paid.

Two of the most common business payment themes on the minds of chief financial officers are how to solve for fragmented technology and how to integrate fragmented processes.

“Generally speaking, corporates believe there are smarter ways of solving for business payments than the technology that’s accessible to them provides,” Richardson said. “They’re rationalizing their vendor relationships and looking for more meaningful strategic partnerships to help them streamline business payments.”

Many large corporations simply don’t have the staff to pursue new revenue streams. Though they realize fintechs can address those gaps, companies are often unsure how to proceed. Fintechs can also be uncertain how to position themselves to businesses.

Optimizing business payments is that much more difficult because of the sheer amount of information available to companies. It can be tough for businesses to get tangible insights into what is changing in their industry.

“They’re looking for sources,” Richardson said. “They’re searching for the watering holes where they can find the latest on the industry, because it’s critical to find out what the best in class is doing. It used to be businesses could speak to their bank and get all the information they needed. Now corporates have more multibank relationships than ever before.”

Companies recognize that they should be more independent and less reliant on their bank. Financial institutions and fintechs have rushed to offer solutions, fueling competition. The competition has been beneficial for businesses because they now have an array of solutions to choose from.

In European markets, there are more payment types, a situation that creates choices for customers and companies. As more options become available, U.S. CFOs must consider the most effective way to modernize payments. It could mean moving from paper-based payments to electronic payments or making cross-border payments more effectively.

The ability to modernize through connected solutions is greater now than it has ever been, but adoption has been slow. According to a 2022 AFP Payment Survey, over 90% of U.S. businesses accept checks for incoming payments, and 86% use checks for outgoing payments. In most cases, it’s not for lack of better options; it’s because that’s the way things have always been done.

“Cracking the behavior is critical,” Richardson said. “Frankly, it’s a cultural thing. It’s already being done in other countries, but over the next few years, moving away from checks will be significant to overcome for U.S. companies. Once that happens and CFOs’ eyes are opened, they will see a new wave of change within their organizations.”

Though many businesses don’t want to process paper in and paper out, they are concerned about fraud. That means checks might stick around.

“We aren’t likely to see a government mandate in the United States where checks would be completely mandated out of the payment system,” Bodine said. “That means we aren’t likely to see an eradication of checks until there is a concerted effort by the largest corporations in the world to get rid of them.”

The complexities of fraud have brought companies to a tough juncture. Criminals now operate as if they are businesses, and if an organization is targeted, it’s not by chance. Bad actors are looking for weaknesses. If they find one, they will conduct deliberate, purposeful attacks.

“The opportunity for corporates is to actively search out best practices and not become the laggard,” Richardson said. “If you’ve got your head in the sand with fraud, you run the risk of getting hit twice. One, it’ll affect your cash flow because you’re making slower payments. Two, fraudsters will prey on those that are the weakest or the slowest to move. You don’t want to be in that category.”

In addition to outside threats, businesses must be aware of insider fraud, which can hurt an organization just as much. To mitigate that threat, businesses should create a culture where the company’s money belongs to every employee. It’s everyone’s responsibility to make sure those funds are safeguarded.

Employees should know it’s appropriate to challenge suspicious transactions. It will become even more important as tech develops and criminals have better tools. Although new technology can increase fraud risk, it can also mitigate it. For instance, business payment networks can provide absolute verification of the relationship between the account sender and the account receiver.

“Fraud prevention should be a priority, but it’s also an ongoing process,” Richardson said. “That’s when it’s important to have those watering holes, to check your sources to find out the latest on fraud prevention. More knowledge makes corporates more independent. It’s critical if they’re thinking about a broader payments structure that reaches beyond their own shores.”

If companies embrace the technology that’s available as a service solution, they will find it won’t take long to get up to speed. Partners can quickly connect solutions that will optimize a company’s payments systems.

“Partner, partner, partner with an exclamation point,” Bodine said. “The data shows that if you want to see improvements in efficiency, costs, and long-term sustainability, it’s best not to attempt payments modernization internally.”

Payments partners can now onboard businesses in days or weeks as opposed to months or years, so there is a rapid time to value. Though some U.S. companies may be cautious, the businesses that modernize their payments systems soon will be best positioned to reap the rewards.

“Recognize the payments landscape has changed quite significantly,” Richardson said. “It’s a smaller world now. But if you look at what other countries are doing, you’ll be encouraged about what’s coming your way.”

The post Rapid Time to Value: Modernizing Business Payments appeared first on PaymentsJournal.

After years of restrictions and uncertainties, people are eager to travel the world again, whether for leisure, business, or reconnecting with loved ones. As a result, international travel is getting back to—and in some cases even surpassing—pre-pandemic levels. 

Dynamic Currency Conversion, or DCC, is making the travel experience more seamless. On a recent PaymentsJournal podcast, Ed Robles, Senior Director of Sales, Business Development at Euronet Worldwide, spoke with Albert Bodine, Director, Commercial and Enterprise Payments at Javelin Strategy & Research, about how simplifying currency management can create new revenue opportunities for financial institutions.

Travelers today expect to manage their finances abroad with the same ease and convenience they enjoy at home. Historically, this has been a challenge given the range of currencies international travelers have to deal with and the limited number of exchanges available. DCC is changing that.

DCC, which is offered at ATMs and point-of-sale terminals, allows international travelers to pay or withdraw money in their home currency instead of the local currency. Essentially, when a traveler uses their credit or debit card abroad, they’re given the option to convert the transaction into their home currency at the point of sale. Travelers can lock in the exchange rate at the time of the transaction, avoiding the uncertainty of fluctuating rates.

One primary benefit is transparency. Travelers can see the exact amount they’re spending in a currency they understand, which helps with budget management and eliminates the guesswork of exchange rates. DCC also provides a better exchange rate compared to traditional currency exchanges, reducing the overall cost of foreign transactions. 

“If you are withdrawing pesos in Argentina and you don’t know what the conversion rate was, DCC will convert and provide the rate for you,” said Robles. “You have the option as the cardholder to accept or deny the transaction based on the conversion. If you accept, your receipt will give you exactly the same numbers you’ve seen on the screen, so you know what you paid for in your home currency, even though the money you’re withdrawing is the local currency.

“As it gets back to your bank, that same amount will be on your statement at the end of the month,” he said. “You don’t get hit with international fees or any other conversion fees.”

One common difficulty travelers face is the high fees associated with withdrawing cash abroad, along with fluctuating exchange rates that make it hard to know exactly how much they’re spending. Finding ATMs that accept their cards and offer reasonable rates can be an added inconvenience and time-consuming. 

“At Javelin we analyzed some of the routes around the world,” Bodine said. “We found that if you were to send $200 through traditional correspondent banking means, in some cases that would cost you $104 in fees on one of the routes. You’re talking about 52% of the transmitted amount in fees that the intermediaries are taking.”

“I remember the days where, whether it was for a personal transaction or even a business transaction, cash was required, and we had to partake in some type of hedging activity,” he said. “I love the transparency aspect of dynamic currency conversion, where you can see the fee structure on the front end, and the cost that it drives down.”

On the other hand, some travelers may have leftover local currency as they prepare to return to their country of origin. While not yet widely available, technology exists to convert foreign currency back to dollars or another home currency. Euronet is in the process of certifying certain ATM models to handle this conversion.

Robles pointed out that this is an important service for overseas travelers to avoid the double whammy of currency exchanges. “We get hit by a 17% to 20% conversion rate at the airport kiosk,” he said. “When we want to exchange it back to our local currency, we get hit again.”

For financial institutions and merchants, DCC brings several advantages. By enhancing customer satisfaction and providing a valuable service, it can lead to higher transaction volumes as customers are more likely to use services that offer transparency and convenience. Moreover, financial institutions and merchants can find additional revenue streams through better exchange rate margins and increased usage of ATMs and POS terminals. 

Euronet recently noticed an emerging trend after reviewing reports with one of their clients. They noticed a significant number of exchanges involving the Australian dollar in a particular area with a large Australian population. Euronet notified the bank, which then notified their merchants.

One of the merchants, a restaurant, decided to incorporate an Australian beer into their menu and advertised it to the local community. As a result, Australians started coming to the restaurant for dinner, drawn by the familiar offering.

“And the way that happened was through the DCC analytics that we provide our customers,” said Robles. “By noticing that there were a lot of Australians in the area, ready to spend money, their revenues went up.”

The post Reinventing Currency Exchange for Global Travelers appeared first on PaymentsJournal.

In an era marked by rising inflation, prepaid cards have become more than mere financial tools. They are increasingly seen as strategic assets in managing the economic pressures felt by consumers and retailers alike. The benefits of gift cards extend beyond financial transactions, helping retailers build personal relationships and loyalty with their customers.

In a recent PaymentsJournal podcast, Sam Lituchy, Vice President and Head of Gift Solutions at Fiserv, spoke with Jordan Hirschfield, Director of Prepaid Payments at Javelin Strategy & Research, about how prepaid cards have evolved into multifaceted tools and how the benefits for consumers can also benefit the issuers.

The reasons for businesses to offer strong gift card programs are many. Fiserv data shows that revenue growth is about 15% to 25% greater when customers are engaged in a merchant’s loyalty offering or program. That tends to show up in a variety of ways, whether from increased frequency or greater average order value. 

On top of that, prepaid cards can provide a more cost-efficient customer acquisition tool than other competitive advertising or marketing channels. “A strong loyalty program can turn a traditional consumer or user of that program into a great advocate,” Lituchy said. “Once that happens, the user often starts a social recruitment journey, bringing in friends or family members into that program.”

Lastly, the data captured from these loyalty programs is extremely powerful. 

Merchants have an opportunity to leverage this data, gaining insights into demographics, engagement patterns, and purchasing behavior. It allows them to analyze what is working well, what is not, and what they should double down on.

“Customer acquisition costs are worth keeping an eye on here,” Hirschfield said. “What we see in our research is if you use incentives in concert with your loyalty program, you might get $20 savings to acquire a new customer. That’s pretty impactful, and all those benefits have a knock-on effect on spend.”

 There’s also a spending uplift when a retailer can rely on loyal customers. The small things you might do to bring customers into your loyalty program pay off time and again through not only the first customer but also the social aspect of getting more customers in.

Prepaid cards can also be a more cost-effective payment method, driving top-line growth and bottom-line savings. Many merchants are unaware of the benefits of the upfront cash that a gift card sale can generate for merchants. Those funds can be invested in a variety of ways. 

Consumers tend to spend more than the face value of the card when they come in. They may come into a store with a $50 card and ultimately spend more than that. Javelin’s research indicates that 40% of gift card recipients will always or usually spend more than the value of a card. Another 25% splurge on a more expensive item than the card’s value, and 30% say they will visit the store more often. By getting people to come into their store and have that tactile experience, merchants might have another 20% that try a new brand or product or service. 

“The TV that my kids use for their video gaming went out,” Hirschfield said. “I used a gift card and ended up buying a more expensive TV than I was anticipating. It was a better brand than maybe I would have normally done for the less technical TV they play their video games on. Without really planning to, I maximized the value of that gift card that I had sitting here.”

On the flip side, smaller balances do get left on cards. Those unused balances over time can continue to build and ultimately get recognized as revenue, which is obviously a benefit for the business. A few businesses have been able to build a lot of remaining balance, which increases revenue. 

The self-use cycle allows those stored values to always remain in the merchant’s account. That merchant can put that money to work while the consumer is waiting to use it. While those funds are a liability on the balance sheet against future use, they can be interest-bearing.

Consumers in the loyalty program provide more value to the retailer when they reload the card. It may have started as a gift, but the card becomes a cyclical self-use item if it’s constantly being decreased, never reaching zero but always providing continued benefits to the consumer and the merchant. That arms the merchant with much more powerful information and at a reduced cost rather than doing such research through a third party. These cost advantages become amplified because 80% of self-purchasers anticipate buying more cards for self-use in the coming year. 

“Gift card” has become in many ways a misnomer because self-use is what drives the repeatable business for prepaid cards. When people buy a gift card for themselves, they’re doing it to earn rewards. Javelin’s research shows that among people buying prepaid cards for self-use, 40% do it to earn loyalty points, while 48% do it to take advantage of a promotion.

One of the least-known benefits of offering gift or stored-value cards is that payment processing fees are reduced. The total cost between a gift card sale and its subsequent usage tends to be lower than a traditional interchange driven payment. There are further savings when merchants can incentivize consumers into their first-party app or wallet, to continue bringing them into the merchant ecosystem. 

A handful of examples in the marketplace, like Starbucks and Walmart, have done an exemplary job of bringing consumers into their experience, keeping them involved in that ecosystem. That drives down the cost of acceptance for those merchants on each transaction. The most successful gift card programs will use synergy and consumer habits to bring advantages of all kinds to the issuers and the customers.

“I have been a loyal Delta flyer for years, and my Delta account is tied to my Starbucks account,” Hirschfield noted. “If I load up my card with $25, I get something like 250 miles.  If I load $100, it’s more like 2,000 miles, for money that I’m going to spend at Starbucks anyway. These programs not only reward regular use but can tie in like-minded partners to do so in ways that engage the consumer on multiple aspects to do a bigger initial purchase. And that $25 to $100 purchase at Starbucks reduces their cost, when you consider the average price of going to Starbucks is probably somewhere between $5 and $10 per person.”

Any well-run loyalty program combines all those advantages. It’s not just about enticing people to buy a gift; it’s getting them to also buy for themselves, to be more engaged, earn those points, earn those rewards, and build that loyalty. 

Learn More About Fiserv Stored Value and Loyalty.

The post It’s a Gift: The Hidden Benefits of Prepaid Cards appeared first on PaymentsJournal.

With the growing demand for immediacy and a seamless experience in personal finance, credit unions must keep up to remain competitive. While many of these institutions have remained competitive with lower rates, they often lag behind banks and other lenders in the digital lending space in convenience. In an era of instant credit, speeding up the loan origination process is essential for maintaining and expanding credit unions’ market share.  

In a recent PaymentsJournal podcast, Scott P. Young, Senior Vice President, Emerging Services at Velera (formerly PSCU/Co-op Solutions), spoke with Brian Riley, Co-Head of Payments at Javelin Strategy & Research, about how credit unions can move confidently into a digital future.

According to Young, credit unions face three major challenges in the realm of digital account opening and credit card origination. The first is a lack of automation, combined with a lack of digitizing and communication. Many credit unions don’t fully grasp the operational efficiencies that can be gained and the human error that can be lessened through automation. And they don’t appreciate that even regulatory disclosures or adverse action notifications can be digitized and automated as well. 

The second is fraud. Digital lending can be perceived as high-risk for a credit union, but there are tools that can make lenders comfortable even when they’re not able to see a member in person. With a layered approach to authentication and know-your-customer rules that employ machine learning, employees can be confident that they’re dealing with the right person.

“We like to say fraudsters don’t like to take selfies,” Young said. “Technology now allows us to match a selfie with the face on a driver’s license. In one instance, we actually went to the DMV and validated that a license was fake, and we were able to stop that fraud.”

Finally, there’s the ability to build real-time integration, so transactions can be processed in real time, including ones made through an app. That level of service drives member engagement, although the technology at many credit unions can struggle to keep up with the demand.

Getting a card activated rapidly is one of the biggest challenges financial institutions face. They need to make sure it doesn’t sit dormant in someone’s wallet. Once usage begins, consumers quickly develop a muscle memory and often keep using it. That’s one of the reasons that quick activation and the whole digital play are essential.

“One of the biggest challenges credit unions have today is the age of its membership, and it plays right to the sweet spot,” Riley said. “These are all things that are native to Gen Z and the younger age cohorts.”

It’s a challenging time for credit unions wanting to hold true to their ethos. They must drive more instant approvals to get engagement, especially with younger members. Credit unions are about people helping people, so if there is a chance to approve an application, it’s important to at least keep it pending rather than simply respond with a hard decline.

“That is one of the advantages of a smaller lending institution,” Riley said. “You get to move outside the automated lending model into judgmental lending, looking at things that go beyond your basic FICO score. It’s knowing more about your member.”

Gen Z and (very soon) Gen Alpha are the smallest cohorts of credit union members. The challenge for credit unions is to capture their share of mind. The differences in the generations can be a means for approaching this problem.

“One of our credit unions shared recently that there was a gentleman in his 70s, 
clearly not tech-savvy at all,” Young said. “His granddaughter was opening an account with a credit union and said how easy it was. So he did the same and was surprised at how seamless the process was. He didn’t really know what a digital wallet was at that time, but he soon found out. He is using his digital wallet everywhere to shop now.”

To deliver the immediacy and seamless experience members expect in the application and approval process, credit unions must first evaluate their current technology. Some credit unions “set and forget,” without going back to review and assess if they need to modernize. Young’s recommendation: Reinvent the member experience with a digital-first mentality. Map out your member experience journey, then challenge yourself and your teams to digitize steps in the experience wherever possible. 

As Young pointed out, looking at your own day-to-day life can help you understand where improvement is needed. “I want to share a day in the life of Scott on a business trip,” he said. “As I’m driving to the airport, I pay for my tolls digitally. At the airport, the parking garage tells me how many spots are available on each floor digitally. I do say hello to the TSA agent, so I’ve talked to somebody that day. 

“I’ve already checked in for my flight, received my boarding pass, and selected my seat. As we’re landing, I check in with my car rental company, choose my car, and go straight to a car with the keys already in it. I use a QR code to exit the garage and drive to the hotel. Do I go to the counter? No, because I’ve already used my app to check into my hotel room and request a digital key. I can go right to my hotel room, use my phone, and open the door.” 

“I’ve lived my entire day digitally. Then I got thirsty and thought I really could use a soda. 
So I went to the soda machine at the end of the hall and guess what? It only took coins.”

“When you’re faced with digital experiences and digital convenience all day long and you come to a legacy process, that really stands out. Don’t be the soda machine in a day full of digital experiences.” 

The post In a Digital World, Credit Unions Find Their Footing appeared first on PaymentsJournal.

New cross-border payments solutions are offered seemingly every day. These solutions use everything from stablecoins to pay-by-bank platforms. However, international wire transfers still play a crucial role in money movement, and that’s not likely to change anytime soon.

In a recent PaymentsJournal podcast, Justin Jackson, SVP, Head of Enterprise Payments at Fiserv, and John Min, Chief Economist at Monex USA, discussed the present and future of international wire transfers and the methods financial institutions can employ to leverage this powerful tool.

Wire transfers have a place in the payments landscape because they function more efficiently than the alternatives. They’re secure because banks on both ends of the transaction are constantly monitoring its status. Wire transfers are also more reliable because of the beneficiary information that accompanies the transaction and ensures that the payment is routed to the right account.

Account-to-account and P2P payments, which have grown immensely in the past few years, have limits on transfer amounts. Wire transfers can far exceed those limits, moving tens or even hundreds of millions of dollars. They also have international reach, which is vital to companies doing business around the globe and are often a lifeline for consumers with family overseas.

International wire transfers do have downsides, however. Issues often arise because financial institutions aren’t aware of all the aspects of the transfer process.

“One theme that keeps coming up is transparency,” Jackson said. “You don’t know how many intermediaries are going to be handling the transaction and what their timelines are. How long is it going to take them to deliver your funds to the next link in the chain? Most importantly, you don’t know the fees they’re going to charge you.”

When sending overseas, American institutions can wire funds in U.S. dollars or in the recipient’s currency. It can be convenient to send in dollars because the institution doesn’t have to calculate foreign exchange (FX) rates, but convenience comes at a cost.

“Once the dollar hits the foreign account, it has to be converted,” Min said. “At this point, you have no control over the exchange rate or the markup on that transaction. The recipient bank or the financial institution can apply whatever rate it wants, and therefore the hidden costs could be significant. It could be as much as 2 to 3 percentage points.”

The fees come directly out of the transfer’s funds. A business owner, attempting to pay an invoice for €10,000, might find out that only €9500 of the wire transfer was applied to the invoice. That leaves the owner no choice but to send another wire transfer to cover the shortfall, and that payment could also incur fees.

Because of government regulations, institutions might run into roadblocks when trying to conduct transfers in certain currencies. The U.S. State Department has mandated a list of currencies that are prohibited for foreign transfer.

“Some transactions are in a gray area,” Min said. “Sending money into Brazil, for instance, is cumbersome. It’s not just sending the funds. The recipient has to receive paperwork and complete it. Sending money into China can be very difficult because of the regulatory oversight. If you send U.S. dollars into different foreign currencies, then different regulations apply and different fees apply.”

Because of fluctuating FX transfer rates and shifting government regulations, international wire transfer fees can vary substantially.

“The fee could be as low as zero dollars,” Jackson said. “It’s not exactly free; it’s included in the relationship with the financial institution. Fees could also be as high as $50 per wire transfer, but they average around $45. It’s typical for the sender to pay a fee to send a wire transfer, and it’s not atypical for the recipient to be charged a fee by their own financial institution.”

Fees can be a value-add for banks and credit unions because they create an income opportunity.  All pricing is negotiated in every FX transaction, so institutions can earn revenue from the markup on currency conversion.

“There’s no one fixed price or one fixed markup rule, so it’s up to each institution to mark up whatever they can get away with to some extent,” Min said. “If you’re doing an FX transaction with a company like PayPal, you could be facing a 250 to 300 basis point fee. It’s a very lucrative revenue source for financial institutions.”

At a 300 basis-point rate, a $10,000 transfer sent overseas incurs a $300 charge. The financial institution gets all the markup share if the transaction is originated through the bank or credit union instead of a third party. Reducing the fee to 100 basis points would still mean $100 of income to the institution and a $200 savings for the sender of the payment.

Because of the complexity involved with international wire transfers, many institutions have turned to partners. There’s a level of due diligence that should always be applied to partnerships, but it’s especially true of foreign exchange services. Banks and credit unions must ask the right questions to ensure a partner can truly support their needs.

“Institutions should look at their customer base and the types of transactions they’re likely to perform,” Jackson said. “Then ask partners about the currencies they support. How do those line up against the transactions my accountholder base wants to execute? What are the exchange rates? What are the fees? They should also find out any additional fees based on markup.”

The duration of the transfer is another key question. The standard banking practice for international wire transfers is the day the transfer is initiated plus two. If the transaction is conducted today, the money usually appears two days later. That delay is caused by batch processing, because many banks can conduct transactions only during set hours.

Partner companies often operate 24/7, so transactions can be completed the same day or the next day. Many partners have also established branches in other countries, which can speed up transactions and make exchange pricing more competitive.  

“The benefit of working with a fintech partner is they’re plug-and-play,” Jackson said. “It connects into your core account processing system; it’s wired into your institution’s online banking system. It fits into your existing reporting structures and data structures and uses existing connectivity. It’s easy and simple, and there’s not a big technical lift.”

While there are strong benefits to working with partners, institutions must ensure they’re working with a regulated money services company. In the United States, that means they’re licensed to operate in every state and at the federal level. It’s critical that financial institutions aren’t assuming any additional risk by working with a third-party partner.

Institutions that are using their own systems to send U.S. dollars through an intermediary are leaving an opportunity on the table. Despite talk of deglobalization, more businesses than ever are getting involved in international commerce. As that trend increases, companies will look for more efficient ways to send money.

“You’re able to give your customers a better service while providing them cost savings and generating income for your institution,” Jackson said. “Foreign wire transfers and foreign exchange services can be a valuable offering because they’re a win-win for your institution, your customers, and the recipients of their payments.”

The post A Win-Win: Leveraging International Wire Transfers and Foreign Exchange Services appeared first on PaymentsJournal.

In the past, the chief financial officer’s role has been somewhat relegated to the financial aspects of a business. Now, CFOs face a challenging array of responsibilities that include payments modernization, fraud mitigation, and the selection and implementation of technological solutions.

In a recent PaymentsJournal podcast, Jeff Feuerstein, SVP of Paymode-X Product Management and Market Strategy at Bottomline, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed the obstacles CFOs face and the role technology plays in the finance office.

Though CFOs have a lot on their plate, three key themes highlight their agendas. The first is payments modernization, which is an integral part of a company’s digital transformation. This could include the migration from paper checks to electronic payments. It could also involve the transfer from paper invoices or documents to data that can be leveraged across the enterprise.

“The next big theme is fraud and risk mitigation,” Feuerstein said. “Recent research shows business email compromise has grown over 70% year over year. Fraud is riddling organizations in such a way that CFOs are concerned about when, not if, their company will get hit by an attack. How do we protect ourselves and our businesses?”

Because of the tough interest rate environment, the last priority on CFOs’ agendas is their organization’s cash position. Understanding their working capital enables leadership to fully grasp where they stand at all times and make more informed business decisions. On top of those three themes, CFOs must keep their organizations up to speed with the latest technology, which hasn’t traditionally been a part of the role.

“What’s surprising about some of these discussions is they actually involve CFOs,” Wester said. “In the past, CFOs were tangentially involved with discussions about technology, especially payments, but not in a way where they were decision-makers. CFOs are now coming into these discussions fully informed on what’s going on in the space.”

Companies were often divided between the business side and the tech side, but that division has eroded over the past few years.

“This side spoke business, this side spoke tech, and someone had to translate,” Wester said. “Though there are still times when that divide exists, now everyone in the CFO’s office has a strong understanding of what’s going on in the technology side.”

Another change to the CFO’s role is that, 10 to 15 years ago, the finance office was very focused on the enterprise resource planning as the general ledger.

“There were not as many of what I’d call ‘point solutions,’” Feuerstein said. “Today, you’ve got several different point solutions, whether it be AP automation, AR automation, cash management products, cross-border solutions. CFOs are leveraging all these solutions and tying them together in a way that’s interoperable across the organization. It doesn’t just improve the efficiency of the CFO’s office; it brings revenue to the bottom line.”

One of the main responsibilities of today’s CFO is to understand all the solutions that are offered and how they can be leveraged. Given the number and complexity of those solutions, it can make for a difficult task. But the different perspective can also lead to new insights and improved partner relationships.

“They’re much better equipped to engage with partners,” Wester said. “They know what they should be able to get, and they’re judging those partners accordingly. It holds the partners’ feet to the fire somewhat, because they now have an entirely new constituency they have to serve.”

Though that represents a challenge for partners, it’s an opportunity as well.

“The bar has been raised for partners, and the competitive landscape for them is tougher than ever,” Feuerstein said. “But it also creates opportunities for partners to work with customers who are well-informed and fully understand their solutions. If partners are looking to elevate their game, those are the types of customers they should look for, because it elevates both companies.”

Finance teams are no longer simply cost centers for organizations. Payment strategies delivered by the CFO’s office are driving not just product innovation but also accounts payable automation and revenue back into the organization in the form of rebates.

Payment networks that can improve automation and generate rebates are a vital part of the transition away from the cost center model. Leveraging technology is the key, which could be through a virtual card, a premium ACH product, or a financing solution. The most powerful technology for finance offices, however, is likely to be artificial intelligence.

“In regard to AI, there will be both sustained innovation and disruptive innovation,” Feuerstein said. “The sustained innovations are those marginal gains that are improving existing processes, like answering questions faster at the customer support center. Disruptive innovation will be in areas like supplier onboarding or contract management that will be completely reinvented because of new language models.”

AI can also be a critical tool in the fight against fraud. AI can mitigate fraud in several ways, including:

Though companies should use technology to the fullest, they must also understand its limitations. For example, as the tech develops AI is likely to flag false positives.

“AI is clearly the topic that everyone wants to talk about, but we know that AI isn’t a magic wand,” Wester said. “It’s not going to fix substantial problems that exist within an organization. And AI is being offered and implemented everywhere. If everybody is using the same tools, then the gains will be the same across all organizations. The real question is whether your business is using the tool in ways nobody else is.”

Though companies must get creative with AI, they shouldn’t wait for inspiration to strike. There will be a first-mover advantage for those companies that adopt AI early and find ways to use it in their businesses.

A recent U.S. Bank survey found that 45% of CFOs say they’re just starting their journey toward digital transformation. For finance offices, the landscape is far more complicated than it’s been since the financial crisis. Interest rates are still rising, and cash flows are king.

“Look for the areas where you can drive the most amount of change in your organization,” Feuerstein said. “It could be working capital, security and risk mitigation, or automating those paper-based processes that are sticking in your organization. In the U.S., there’s going to be $32 trillion in spend flowing around, so there’s tons of white space in this market.”

“We’ve been talking about digital transformation for a long time, but we’re still really at the beginning,” Wester said. “The most important message to decision-makers is that this is the time to do it. Just because there’s a lot of white space doesn’t mean other companies aren’t doing the same things. It’s an important time to evaluate your payment strategy and digital transformation plan and make those moves.”

Discover other trends and topics being discussed in the CFO’s office in the Bottomline 2024 Business Payments Outlook. Get insights from Bottomline subject matter experts, along with industry partners and influencers.

The post We Speak Tech: How CFOs are Reinventing the Enterprise appeared first on PaymentsJournal.

Organizations have faced the challenge of deriving insights from their data for a long time. Some enterprises have the ability and resources to do this, but others are far behind. Artificial intelligence (AI) has the capability of catapulting data analysis into the future, allowing enterprise analytics to fit into the daily, general health and success of a company.

Billtrust has been at the forefront of using AI to build out analytics processes, especially within the payments landscape. In a recent PaymentsJournal podcast, Ahsan Shah, Billtrust’s Senior Vice President of Data Analytics, talked about the AI-fueled future of data analytics with Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research.

Organizations can no longer say they are not looking at AI. The success for most is going to come with the democratization of generative AI as opposed to a top-down mandate.

“Some companies are more advanced than others, just by allowing people to try it in the form of their goals and their own self-training,” Shah said. “Some of our teams here at Billtrust are doing hackathons where they just learn how to do this amazing thing. I think it’s going to flourish organically, and I think that’s the right way.”

AI is poised to go from a foundational model universe to a large set of tools, tooling, infrastructure, and services. The technology advancements are moving much faster than the rate of adoption. OpenAI is already at the forefront of multi-modality.

“There has been an explosion in the number of different systems that are monitoring various parts of how a business operates, ranging from frontline customer success to the nitty-gritty details of actual payment processing or chargeback processes, all the way up to when is revenue recognized and how is cash managed,” Miller said. “One of the challenges for teams has been to figure out how to put together those different pieces.”

Most companies ask someone to piece together various pieces of information or cut and paste some data in a spreadsheet. Maybe they have a dashboard that brings together different pieces, but even maintaining that dashboard, adding new data as it comes to the forefront, can be a challenge. The explosion of data creates opportunities for insight but also challenges in terms of the sheer scale, especially for organizations with limitations in teams and resources.

This idea of cross-functional analysis is a challenge not just because of the volume of the data but also because of its structure. “You have three different kinds of vectors happening here,” Shah said. “You have the insane amount of data, the urgency of trying to act on it, and the explosion of the different functions. Enterprises need a better way of synthesizing the data across the functions and to be able to get it to the right person who can act on it, which is often overlooked.”

Emerging generative AI technology may offer one way to solve some of these problems, such as a new way to create reports other than simply handing a definition to an engineering team that produces the report. Rather than being pushed from the systems, data can be pulled from the systems by precisely the people who are in a position to act on those insights.

The new term is generative BI, for generative business intelligence.  You can simply ask a specific question in human language, such as “What anomalies are you seeing in my payment patterns for buyers in the West Coast?” That’s something that traditionally would have taken weeks of engineering analytics.

“It’s an exploding space,” Shah said. “Six months ago, there might have been one or two names that had LLM products in market that we could use. Everyone had written a poem in ChatGPT and experienced firsthand the power of the language model. But most people had also run headlong into the challenges of the data-gathering side of that model, which offers an interaction layer and doesn’t necessarily offer the insight. That’s the next step.”

Users of ChatGPT are limited to the context window. You can type in your question, but the tool doesn’t know about you, your enterprise data, your CRM, or your transactions. Integrating the data layer and the analytics layer into the LLM directly requires engineering and domain fine-tuning of the models.

There’s only so far you can go with a foundational model. How do you expose and make your data scalable and engineered in a way to take full advantage of generative AI? That is something Billtrust is actively working on.

“We are in the process of launching our Copilot product, essentially embedding a ChatGPT-like enterprise secure interface into it,” Shah said. “Rather than going back to the old way of hiring a data analyst and saying build me a report, you’re now going to Copilot and asking a specific question. We should not think of this as a profoundly transformative thing but rather a way of making what you do better.”

Some companies are already blazing through the capabilities. It’s not just Open AI, but also Facebook Meta and AWS and Claude Anthropic integration. You’re going to be hearing a term called agentic workflows.

“While this seems super forward-looking, I don’t think it’s that far ahead at all,” Shah said. “You’re going to see a universe where people are going to log into SaaS products or B2C products and simply ask it, “Book a trip for me and my family,” and it’s just going to do a multi-step flow to book your hotel. You could translate that to B2B now. Instead of booking a travel reservation, you might say run a campaign or target these customers.”

When systems act based on limited cues from human beings, the interoperability of those systems becomes critical. This suggests the need for standards and essentially another layer of API development.

“It’s important to have governance to avoid the problematic and even catastrophic implications of AI,” Shah said. “But it cannot be done in a way which impedes the ability of companies to innovate and build great products.”

One other concern is cost, which is high and still going up. The unit cost is slowly starting to bend, but the absolute cost is growing as the models exponentially add tokens, which creates additional computing demands to support them.

But the possibilities far outstrip the challenges. “You’re only limited by your imagination,” Shah said. “The best implementations on the agent level will create the biggest universe for that imagination to run wild. It’s almost like giving an artist the capability to focus on what they’re best at and removing the friction or the redundancy of other tasks. The technical capability will be there far before the implementations are there to support that kind of imagination.

“There’s going to be an entire knowledge of how to use different models effectively for different businesses. I see this explosion of options. It just might be a little bit of a zoo for a while till the dust settles.”

The post Where Will AI Take Data Analytics? The Sky Is the Limit appeared first on PaymentsJournal.

Instant payments systems have gained traction in countries that had cash-based payments infrastructures. While services like FedNow and the RTP network have launched in the U.S., instant payments haven’t taken hold due to the firmly established financial system.

In a recent PaymentsJournal podcast, Abeer Bhatia, CEO of Personal Lending & Head of Enterprise Payments at Wells Fargo, and Elisa Tavilla, Director of Debit Advisory Services at Javelin Strategy & Research, discussed the past, present, and future of instant payments.

The payments space has undergone massive shifts in the past few years, driven by a few central undercurrents.

“There’s almost an infinite list of trends happening, but two stand out most,” Bhatia said. “One is the increase in instant payments and the attention it’s received since the launch of FedNow and RTP. The second is the expanded availability of data that companies have within the new formats.”

Instant payments services allow for much richer data to be transmitted between sender and recipient. It’s facilitated by the ISO 20022 messaging standard, which acts as a universal payment language. So far, countries outside of the U.S. have been swifter to adopt the new model.

“There are unique aspects about markets like Brazilian and Indian which caused instant payments to take off there,” Bhatia said. “The main reason is it’s needed. It’s a compelling alternative to cash payments, and it allows them to conduct both P2P and customer-to-business (C2B) payments.”

In India and Brazil, the government has effectively mandated the use of instant payment rails, making growth fundamentally faster. The U.S. isn’t likely to get a government mandate anytime soon, but that’s not the only factor slowing instant payments adoption.

“The U.S. is highly card centric,” Tavilla said. “Cards are convenient to use and accepted virtually everywhere. There are also over 9,000 institutions in America and two real-time settlement systems. Getting all the financial institutions on board and connected to the networks will take time.”

“P2P has been a primary instant payment use case in markets like Brazil and India,” she said. “P2P has been adopted in the U.S. but, behind the scenes, it’s not really an instant payment. The settlement is asynchronous, but it appears instant to the customer, so there’s no urgency to transition to something else.”

There’s been increasing speculation on the future of instant payments, but there are more practical matters at hand first.

“A financial institution might be able to send money immediately, but there’s a separate question,” Bhatia said. “Can the recipient accept money immediately? Oftentimes, that’s not the case. It will require systems that are currently geared towards batch processing to be redesigned to handle real-time payments.”

Once the infrastructure for instant payments is established, much of the initial adoption might be in industries outside of traditional C2B payments.

“It could be in earned wage access for the gig economy or in payouts in the gaming industry, but those are the types of areas where instant payments will take root in the U.S.,” Tavilla said. “Real-time payments aren’t going to substitute for the existing rails that work.”

Once U.S. consumers begin to understand the capabilities of the rails, real-time payments will take off. The newly launched FedNow will play a significant role in that growth.

“I’m excited to see the network has over 700 financial institutions participating now,” Tavilla said. “It’s still growing, but it’s also iterating more robust features and functionality. That drives more use cases which creates greater value and increases transaction volume. It will be interesting to see how the U.S. Treasury leverages FedNow, given the success of government mandates in other countries.”

New fraud vectors are likely to emerge, presenting a critical challenge for the real-time payments industry, especially given the irrevocable nature of instant payments. It’s paramount for organizations to remain vigilant in identifying fraudulent transactions and preemptively stopping them. Preventing fraud is far preferable to remedying it after the fact. Both FedNow and RTP have implemented multiple controls to combat fraud.

At the network level, both rails have implemented transaction limits, negative lists, and other fraud mitigation tools. The comprehensive data provided by instant payments rails also serves as a deterrent to fraud. Effective security management is essential to instill trust in the networks amid the transition to real-time payments.

Establishing that trust will involve educating consumers about fraud risks and the irreversible nature of instant payments.

“One feature customers value is payment confirmation,” Tavilla said. “Payments are posted in real time with full transparency, which can also mitigate fees or late charges. The customer starts to feel more confident. And the payment details are there so the merchant or payee can easily match the transaction with the payer.”

A security aspect that is still lacking from instant payments is purchase protection. It’s one of the reasons U.S. consumers have been reluctant to switch from credit cards.

“Another reason is consumers love their rewards cards,” Tavilla said. “Until real-time payments can offer comparable incentives and the customer protection piece, the value won’t be obvious enough for consumers to change their payment behaviors.”

Globally, commerce is rapidly shifting towards e-commerce, with card-not-present transactions experiencing much faster growth compared to card-present transactions.

“It’s much easier to use a digital wallet than to type in the card number, address, email, etc.,” Bhatia said. “Digital wallets are a mainstay of online commerce, so maybe the better question is whether one or two wallets will dominate, or if multiple wallets will spring up.”

Digital wallets offer consumers a more convenient checkout experience, which will further drive their adoption.

Tavilla emphasizes that mobile wallets are a permanent fixture, thanks to their one-click checkout simplicity. Financial institutions should prioritize offering customers various payment options to enhance their experience and boost transaction volume. While payments are the primary use case for digital wallets, their potential extends far beyond that.

“It will be interesting to see if the U.S. adopts the super-app concept like Asia,” Bhatia said. “Culturally, Americans prefer to keep their financial operations more compartmentalized. Digital ID cards, however, that’s something that could be adopted sooner rather than later.”

Instant payments may be catching on slower than expected, but they will play an integral part in the coming payments landscape.

“Speed is one of the top trends,” Tavilla said. “Aside from FedNow and RTP, same-day ACH is growing rapidly. The use cases for real-time payments will only increase in the U.S.”

“Systems and processes will need to be retooled to support instant payments before people truly see the benefits,” Bhatia added. “That will take time. And we’ve just begun to explore the concepts of identity and data. There’s going to be a nexus of payments, identity and data that’s going to be very powerful.”

The post A Powerful Nexus: The Present and Future of Instant Payments appeared first on PaymentsJournal.

Organizations turn to fintechs for payment solutions that are as efficient and seamless as the transactions they facilitate. However, behind these smooth interfaces lies a labyrinth of challenges. Security concerns, regulatory compliance, and constant technological upgrades are just a few of the hurdles fintechs must navigate to provide what appear to be simple solutions. For clients, the expectation is straightforward: a payment solution that works flawlessly. The intricate complexity involved in meeting this expectation, though, often goes unnoticed.

It’s easy to make something simple complicated. But it’s difficult to make something complicated simple. In a recent PaymentsJournal podcast, Kieran Draper and Tom Jennings, the U.S. and EU/UK CEOs of B4B Payments, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, spoke about the strategies fintechs employ to ensure their solutions remain both effective and invisible to the user. Highlighted is the delicate balance between simplicity and complexity, especially in the world of international embedded payments.

Ideally, payments get processed with the press of a button, no different from dialing a number and knowing, without having to think about it, that the right person will answer. Customers making payments expect something simple and effective.

But it’s a challenging environment for fintechs right now as they try to deliver that experience, with their funding drying up and regulators coming down on them. On the upside, it’s also a vibrant market. Demand is expanding, as more and more businesses seek to make payments across geographic boundaries and across platforms.

“For a fintech like us, there are a tremendous number of things that we need to take into consideration,” Draper said. “The transactions need to be secure, we have to be compliant in multiple jurisdictions, and the solution needs to be auditable. The trick is to try and figure out how to present a solution to these businesses that shields them from all of this complexity.”

One area with great complexity for companies is offering services across borders and the need to juggle varying regulations and payment methods. To take one example, B4B works with maritime businesses that make and receive payments in multiple currencies, preferably on local rails to keep the costs down.

“Sometimes a ship won’t be allowed to leave port, for example, until they’ve made a payment,” Jennings said. “They need to provide the proof of payment. Traditional banks don’t provide you that information in an easy way, but with our platform, you can just download proof of payment and show it to the port authorities, and the ship can leave the harbor.”

This is the essence of “embedded finance”. When they subscribe to a payment solution, they can embed it into their experience to the point that it becomes transparent to anybody who has to interact with it.   

Another layer of complexity comes from the increasingly stringent anti-money laundering (AML) laws, consumer protection regulations, and information risk management requirements. Navigating these regulations is a daunting task for clients. In the U.S., multiple layers of federal and state AML laws create a challenging compliance landscape, while globally, each country has its own specific AML requirements that continuously evolve. Managing these diverse and ever-changing regulations is an overwhelming burden that clients cannot be expected to handle on their own.

“The market is moving so quickly that you can’t even imagine where we’ll be six years from now, let alone six months,” Riley said. “Regulators have to be more conservative, because they don’t know where the markets are actually going. And then you have business risks that move quicker. Fraud increases when criminals can move quicker than large institutions. Just being able to keep the pace becomes essential.”

“The bar is so high now,” Jennings said. “It’s not just what’s current, but it’s also the horizon planning. You’ve got Dora in Europe, you’ve got PSD 3 coming up, and we’ve got no doubt new AML directives around the corner. It’s constant.”

To help address this, B4B has built a single global platform that is common across all territories of the world, with a single global data processor and a single set of APIs. That allows customers to subscribe to one solution, one set of services that gives them access to tremendous capabilities in the background.

B4B’s channel partners are typically very well established in their own industries and have tremendous experience, but they are also busy and expanding. They are typically good at managing their core business and managing their own customers. But they’re not adept at managing the payments or banking functions that they need to operate smoothly.

Universities are a great example. The payment functions that go with a university’s basic functions are incredibly complicated. Tuition is coming in directly as well as through multiple government sources and scholarships. There’s a whole infrastructure for things like tickets to football games or baseball games, with maybe a different one for the arts department. The best strategy, and the best use of resources, is to let the university target what it needs to do and let the back-office functions get optimized.

“They can very easily find justification for working with a fintech like us,” Jennings said. “Both the students and the administration can see exactly in real time how their money is being spent. It’s convenient for the students, because they’re not very good at handling physical cash and loose cards and that kind of stuff. And we can manage all of that.”

Simplifying financial services is vital to retaining customers. Organizations of all sizes and services must make the complexities of payments invisible for their clients—no matter how complex those things are for the back office.

The post Making a Complex Payment Situation Simple for Your Customers appeared first on PaymentsJournal.

With gift card spend projected to reach $267.3 billion by 2028, it’s clear that gift cards  are an influential force in the market. And the rise of digital gift cards, a trend that continues to gain momentum, is opening up new avenues to engage younger generations.

During a recent PaymentsJournal podcast, Blackhawk Network’s (BHN) Sarah Kositzke, Director of Research and Hilary Spidaliere, Director of Product Marketing, as well as Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, explored, analyzed, and amplified the insights from this year’s Benchmark Report: 2024 Digital Gift Card Leaders, conducted by NAPCO research in partnership with BHN. This market-leading report on the gift card industry, which evaluated the digital gift card programs of 100 U.S. merchants, identifies best practices and opportunities for how retailers can optimize their own gift card programs.  

During the 2023 holiday season, the average individual received around three gift cards, totaling roughly $160 in value. However, when recipients made their purchases, they spent an average of $78 more than the card’s value1. Leveraging a gift card to purchase a bigger-ticket item is commonplace and one of the reasons why gift cards are so valuable to retailers – driving that additional overspend and store visits.

“About a third of people said their favorite gift was a gift card,” Kositzke said. “Most people are still getting single-branded cards, like Starbucks or Amazon, which account for 75% of gift card buys. The Visa and Mastercard options and multi-branded cards are picking up steam though1.”

According to BHN, 77% of purchases were physical cards, even when the transactions occurred online. Physical cards are considered more personal, especially when there’s an option to customize the card. Despite the increasing popularity of online shopping, most gift card transactions still happen in-store, making up 85% of purchases1. But that is likely to change.

“Looking a little further out to 2030, digital cards are going to continue to gain ground,” Hirschfield said. “By the end of the decade, it’s likely to be a 50/50 split. That’s driven by Gen Z and Millennials, who are also significantly more likely to extend their purchases beyond the gifted amount. Digital options are going to be a great way to reach those generations.”

NAPCO Research, in partnership with BHN, examined the gift card programs of 100 U.S. merchants with a specific emphasis on the e-commerce gift card experience. NAPCO developed 130 criteria, across to four major categories.

“First and foremost is discoverability,” Spidaliere said. “How easy is it to find that brand’s gift card program? Next, they’re looking at personalization. Can I pick my own gift card design, or add a personal message? Third, they’re evaluating the checkout experience for efficiency and payment flexibility. Finally, they’re evaluating the recipient experience. Does the card feel like a gift? Is it easy to redeem?”

The end goal was to fully evaluate the purchase and recipient experience for each of the merchants across all platforms.

Speaking to the assessors who reviewed each gift card program, “They’re like a secret shopper,” Spidaliere said. “During the process, they capture hundreds of screenshots and use them to score each of the merchants across the established criteria. Then they crunch the numbers and not only come up with the rankings list, they also identify industry trends and best practices.”

One of the main takeaways from the study is there’s plenty of room for improvement—even for the companies that ranked in the top ten.

“Everybody across the board has something that can be fine-tuned,” Kositkze said. “These are opportunities to drive additional revenue. It could be the placement of cards  or making the most of the fact that 9 out of 10 people are buying other gifts are the same time they’re buying gift cards. That’s a perfect chance to build loyalty1.”

The report found several common denominators among the bottom 20 companies. For one, they were less likely to sell cards across all their devices and channels. Lower-ranked companies were also less likely to support gift card purchases in their app, which is a missed opportunity with younger users especially. But that wasn’t the only issue.

“The most concerning thing with the bottom 20, in some cases the assessors just were not able to fulfill the purchase,” Kositzke said. “They tried several times, probably more times than a customer would, and it doesn’t go through. ”

Issues in the gift card experience can be costly because it can be a customers’ first impression of a company.

“A gift card often kicks off a customer’s relationship with your brand,” Hirschfield said. “It’s a challenging, but also an amazing opportunity, because many times the gift card leads to additional purchases of both your material items and more gift cards.”

One of the key differentiators for the top performers in the benchmark report was a dedicated gifting section on their website and app.

“All the top-performing brands had a clear path to gift cards,” Spidaliere said. “It was clear what customers needed to do, how to personalize, all the ways they could buy the card. The best-performing brands promoted their cards on multiple places on their site, and marketed their program outside of the website and app.”

Top-tier gift programs used social media and emails to attract new customers. Those merchants  also found innovative ways to offer personalization, like giving buyers the ability to upload a photo or video to accompany the card. Top-ranked programs also connected their gift card programs to their loyalty programs to incentivize gift card purchases.

“The recommendation here is to get creative,” Spidaliere said. “Align your promotions to what’s most important to your brand. The top performers had recipient experiences that were really thoughtful and considered both the recipient and the buyer. What’s meaningful to your customers? For instance, you could consider a partnership with other brands that are important to your customers and produce a co-branded promotion that leverages both audiences.”

The 2024 evaluation offers clear takeaways merchants can use to identify untapped opportunities for their gift card program –

Companies should continuously strive to raise awareness of their program, prioritize creating an optimal customer experience with a mobile-first approach, and consider offering options for gift card personalization.

Integrating loyalty programs with gift card programs is another best practice. Companies should explore opportunities to sell and redeem gift cards across all customer touchpoints.  A great gift card program also requires the ability to detect and prevent fraud `, often requiring a partnership with a third-party expert.

Finally, functionality should be the top priority. Companies should regularly evaluate their gift card programs through the eyes of the customer to ensure seamless processes. This approach not only ensures efficiency but also helps identify opportunities for improvement and ways to differentiate the program. Company websites should include site search keywords that make it easier for customers to find gift cards.

“Gift cards pay off,” Hirschfield said. “It’s an easy and low-cost way to turn someone from a stranger to your business into not only a loyal consumer, but an advocate for your brand.”

Source: 1. BHN EQ Global Spring Gifting Study, n=2,019 US consumers 18+, Feb 2024

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