Considering the dizzying array of technologies that have
swept through the payments industry during the last five years, payment
professionals are engaged and eager to learn. That’s the top-line conclusion of
Managing Payment Technology Innovation,
a study conducted by Capital One and the NAPCP, the professional association of
the commercial card and payment industry.
As a group, payment professionals are both knowledgeable and
enthusiastic about the many advantages that new technologies offer. When asked
about the benefits leading them to consider new technologies, the 136
respondents, representing a broad range of public and private organizations, cited
the heightened administrative efficiency as the advantage that appealed to them
most. They valued a range of other benefits almost as much: reduced process
costs, end-to-end procurement transparency, the ability to automate AP/AR
processes, enhanced back-end/post-transaction analytics, and faster processing
speed. In fact, they gave all these benefits a 7.78 or more on a priority scale
of one to 10.
Seeing New Payments Technology Through the Lens of Experience
Their enthusiasm for these technologies, however, is
tempered by a realistic appraisal of the administrative and organizational challenges
in adopting them. Every veteran payment professional knows from hard experience
that unanticipated costs and systems incompatibilities can undermine even the most
promising of technology. And they are leery, too, of the time-consuming
training required to master the unintuitive user interfaces that are sometimes
features of custom-built solutions.
Payment professionals also understand that organizational
inertia can slow the momentum behind any campaign to adopt new technology. The
study found that leaders — at the C-suite or director level — are much more
optimistic about their organization’s embrace of new technology than program
administrators and managers. Leaders are much more likely to declare that their
organizations want to be ahead of the curve and use innovative payment
technologies as a competitive advantage. And the survey revealed that in such
fields as healthcare/pharmaceuticals, educational services, transportation, and
utilities, leaders have indeed pushed their organizations to the forefront of
Perhaps because they are on the front lines of implementing change,
program administrators and managers have a different impression. A significant
percentage of them are skeptical about their organizations’ capacity for
change, citing such barriers as rigid bureaucratic structures and regulatory
and compliance requirements. Having encountered resistance in the past, they
feel that staying up to date with the latest technologies is just one among
many priorities competing for organizational resources.
Knowledge of New Technologies Is Uneven
Capital One and NAPCP used the survey as an occasion to take
a closer look at a sampling of the new financial technologies and products – ePayables,
EMV chip cards, tokenization and blockchain. The familiarity of payment
professionals with these different technologies and products varies
By and large payment professionals are enthusiastic about
ePayables. Thirty-eight percent of respondents said their organizations had
implemented them and more than a third of the rest said their organizations
were considering adding this payment method in the future.
An important reason for the acceptance of ePayables is the
widespread appreciation of its benefits. The ePayables adopters in the survey
identified all the classic arguments for implementation, starting with
simplifying payments processes and earning revenue share and/or rewards.
EMV chip cards have also begun to see rapid acceptance—and
here too payment professionals understand the power of the technology to reduce
identity theft and fraud. In contrast to ePayables, however, payment
professionals are largely unengaged with the technology, seeing chip cards as
an innovation being advanced by credit card companies. In the case of
ePayables, it is the payment professionals themselves who are driving the
Payment professionals are much less familiar with the two
new and relatively complex technologies in the survey: tokenization and
blockchain. Although two-thirds know about blockchain, only 17 percent are
familiar with blockchain applications. Even fewer, just over 13 percent, have
heard of tokenization, and only two reported that their organizations had
implemented tokenization. Although uninformed, they are not indifferent. The clear
majority of respondents expressed their eagerness to learn more.
Industry Associations and Payment Providers Must Step Up
The overall impression generated by the survey is that
payment professionals are intrigued by the new technologies and willing to
adopt them when they understand their benefits, but they lack the knowledge and
resources to advocate for them effectively. The survey points to two
recommendations — one for industry associations and the other for payment
providers — that can help payment professionals overcome these barriers.
Industry associations are ideally placed to bridge the
information gap. More than 78 percent
of respondents reported that
their organizations send professionals to industry events and conferences, and more than 55 percent said their organizations send
professionals to continuing education
conferences. Industry associations can
inform payment professionals about emerging payment technologies. And they can also educate
decision-makers about the value of new technologies.
Payment providers also have a role to play. They must do
more than build solutions that incorporate the latest payment technology. They
should also concentrate on making these solutions more user-friendly. Human-centered
design, natural language search, and application programming interfaces are
just some of the approaches they can use to make their products easier to use
and reduce the costs of implementation.
At the same time, given the accelerated pace of innovation
in payment technologies, payment providers have an opportunity to recast
themselves as strategic partners, offering ongoing guidance and education to
organizations trying to make sense of the new technologies.
Matching the Pace of Innovation
The powerful new payment technologies emerging today have
the potential to dramatically transform the way organizations manage their
purchasing and payment strategy. For those with the vision and determination to
implement them, new technologies will lead to unprecedented reductions in
costs, vast improvements in efficiency, and levels of security that are
Industry associations and payment providers can help their
members and customers make the most of these advances. Industry associations
can find ever more effective forums to disseminate information on new payment
technologies, and payment providers can remove obstacles to implementation and help
organizations make more informed choices.
The challenge for organizations is to match the pace of
implementation to the pace of innovation. With no end in sight to the
introduction of new payment technologies, the contributions of industry
association and payment providers will be ever-more important.