By Curtis Bauer, Chief Innovation Officer of Sphere
The only constant is change and the commerce landscape in during the pandemic put that axiom to the test. New payment types have taken hold, consumers are moving to digital payment methods, and core technology is seeing a shift. Healthcare providers and other businesses alike are laser focused on the concept of a digital-first economy and how to embrace it in a way that makes sense for their organization and customers. In this article, we’ll unpack three digital payment trends and why you should pay attention.
1. Peer-to-Peer Digital Payment Apps: New Ways to Pay
Peer-to-peer (P2P) payments, such as Venmo, Zelle, Cash app, and PayPal, offer the ability to both pay and accept payments from anyone else as long as they have a bank account, debit card, or credit card. Its core purpose was to streamline splitting a restaurant bill or paying a babysitter, for example. Making it much easier by eliminating the need to fumble for cash or write a check.
Peer-to-peer payment services have found a quick way for someone to set up, transfer, and accept money using traditional automated clearing house (ACH) and credit card rails, but ultimately provide the consumer with a great user experience. Because these P2P payment solutions run on the same rails as ACH and credit card, the entire process is governed and ultimate costs are similar to that of traditional ACH or credit card transactions.
So, the big question is, when will we start to see these payment options in business? First and foremost, the majority of these peer-to-peer payment solutions are designed for just that – transferring money from peer to peer. There were not initially designed with the concept of business to consumer.
As a result, they are either not yet available or only available for businesses with low volume. For example, although Zelle offers a “Small Business” option, they only make it available to small businesses if the business’ primary bank supports it and they rely on the bank to govern the product (i.e., fees, processing limits, etc.).
Another example is Venmo, which is owned by PayPal. It supports business accounts; however, it has limited capabilities as it relates to integrations into payment gateways and more importantly point of sale systems or EMR/EHR systems.
Said another way, most peer-to-peer payments products do not allow payment gateways, such as TrustCommerce, to integrate into their platform. This means two things: 1.) We are not able to assist with integrating P2P into Epic and 2.) more importantly, we cannot reconcile P2P transactions along with non-P2P transactions. This would make reporting and reconciliation a challenge for providers. Lastly, pricing for these services is extremely high.
All of this said, we do see consumers moving to a “digital first” approach with making a payment— NFC, contactless, and mobile wallets. We don’t yet see peer-to-peer payment providers ready to go mainstream with businesses and certainly not ready with integration requirements as needed within more complex hospital or practice management workflows. We fully expect peer-to-peer payment solutions to expand and will continue to monitor consumer adoption, integration and reconciliation capabilities.
2. Contactless Payments in a Contactless World
Contactless is on everyone’s radar and it is important to understand its two common definitions:
1) Accepting a payment from a Near Field Communication (NFC) credit card or mobile device. This is where a consumer holds the credit card or mobile device near the credit card terminal and it transmits a signal with card data to process the transaction.
2) Storing a credit card, debit card or bank account information on file, so that the patient or consumer can use this payment during their next visit.
70% of US businesses are experiencing customers requesting contactless payment options.
The demand for traditional cash payments continues to decrease while contactless payments and card on file continue to increase in popularity. What are the benefits of contactless payments? Customers appreciate the ease of use. Contactless also has considerable benefits to healthcare providers. As more and more providers move to digital patient check-in processes, it is opening the door to opportunities to electronically collect healthcare payments from patients or responsible parties up-front, which has significant down-stream benefits with improving collection rates, but also reducing overall post visit collection related expenses.
Most consumers have a payment acceptance preference and do not feel that have had a positive experience if their preferred payment option is not available to them; which translates into providers really needing to ensure they are offering not only a robust selection of payment acceptance options, but also providing the most flexible engagement points to accept that preferred payment where possible.
The majority of patients will pay their balances faster if their billing preferences are available. This alone, tells us that consumer payment preferences and the patient healthcare payments experience cannot be ignored. Some examples of preferred forms of payment include: EMV chip, contactless, Apple Pay/Google Pay, ACH, card on file, and of course payment plans. Examples of engagement points include: (i.e., pre-check in, check-in, post visit, patient portal, text to pay, pay by phone, etc.)
3. Payments Moving to the Cloud
When we refer to “payments in the cloud” there are two components:
- The emergence of e-commerce similarities in the healthcare patient financial engagement process.
- The ability to accept card-present transactions, such as mag-stripe, chip and NFC, within an EMR/EHR system through a device that does not require complex software installation on the desktop.
Let’s first focus on the e-commerce similarities. Like many areas in our economy, COVID-19 has served as an accelerant in how consumers expect change when it comes to interacting with businesses, and we’ve seen huge advancements in the digital healthcare space, such as tele-health and adoption of more robust patient engagement solutions.
However, storing the card on file or “in the cloud”, often referred to as payment tokenization, has really become vital. Having a card on file provides the most consumer-friendly experience possible and the least potential for shopping cart abandonment.
The second aspect of payments moving to the cloud is how card-present or patient-present transactions will work with an EMR/EHR or practice management system. When Epic, Cerner or other electronic medical records systems move to the cloud, where users will only need a browser to utilize the software, payments will be right there next to them, if not ahead of them.
The benefits of moving to the cloud include: reduced infrastructure costs, improved scalability, improved flexibility, quicker enablement of new features and functionality and faster implementations.
To support a truly cloud solution, the legacy single use or “dumb” terminals are getting smarter, faster. These devices will run traditional operating systems like you see with tablets or smart phones. Cloud-based terminals will no longer require being tethered to a primary computer that is requesting the payment or relying on the computer’s internet connectivity and software on that PC to facilitate the payment.
Cloud-based terminals will have a direct connection to the internet and have the ability to accept and process payment requests on their own. Smart terminals also provide the ability to use the terminal for other functions as well, such as employee time management, patient form check in, customer surveys, and much more. From a healthcare provider perspective, the number one benefit is going to be true plug and play capabilities. All that is needed is to connect the device to power and internet. Then, plug in a device identifier that displays on the smart terminals screen into your EMR or practice management solution, basically telling the EMR or practice management software which device you want to send transactions to, and you are done.
Gone are the days of complex software installations, server setups and complex network routing. At Sphere, we are truly excited to launch this type of solution and technology within the TrustCommerce platform this year.
Digital Payment Trend Wrap Up
As you bring your organization into the digital first economy, keep up with these three digital payment trends. Support the digital ways your customers want to pay. Develop a strategy for contactless and card on file acceptance. And, take advantage of the benefits of cloud-based solutions.