Strategic Banking Insights

In the mid ‘90s customers had to visit a bank branch to make deposits, and there were four basic methods by which payments could be made for goods and services:

1. Cash

2. Checks (which would include money orders and travelers checks)

3. Credit Cards

4. Closed loop cards (e.g., store credit cards)

Today’s technology explosion – primarily fueled by high-speed communications, faster settlement of electronic payments, imaging technology, and the Internet – provides consumers with a dizzying array of options to make deposits and payments and move money between friends, which includes the traditional methods listed above, along with expanded offerings such as:

• ACH

• Electronic Checks

• Electronic Bill Pay

• Branded Debit Cards

• Prepaid Cards

• Chip Cards

• Moneygram

• PayPal

• Apple Pay

• Google Wallet

• Bitcoin

• P2P Money Transfer

• B2B Payments

• Electronic Invoicing and Payments

• ATM Deposits

• Remote Deposit Capture

• Mobile Check Deposit

Of particular concern for banks should be the fact that many of the newer payment technologies are provided by non-banks, which are increasingly becoming a disruptive force within the financial services industry as they go around banks to market their products and services directly to the customer.