Angela Murphy, vice president of marketing and solutions for fintech Pidgin, has been nominated for the PayTech Women 2024 Award in the Emerging Trendsetter category. BankBeat talked to Dr. Murphy about the current landscape of payment tech.
How can new payment systems improve the relationship with business customers?
Angela Murphy: By integrating advanced payment technologies, such as contactless payments, mobile wallets, and real-time payment solutions, community banks can offer their business customers faster, more secure transactions. Faster payments will prove especially valuable to small and medium-sized businesses. Given their limited workforce, it’s essential for these businesses to streamline operations.
Faster payments offer numerous benefits to businesses, including quicker access to funds, streamlined supplier payments and simplified expense reconciliation. These advantages significantly lessen the time and effort needed to manage cash flow and lower transaction costs. In contrast to processing checks, utilizing instant payment networks is not only more affordable but also quicker and more transparent.
Which industries are looking for advancements in payments and what are their needs?
A.M.: Several industries — including agriculture and retail — are actively seeking advancements in payment technology. For example, in agriculture, farmers often require flexible payment solutions that accommodate seasonal cash flows and cross-border transactions. Retailers, on the other hand, look for quick and seamless transactions to enhance the customer experience. Each industry’s unique demands arise from their operational nuances, regulatory environments and customer expectations, making it essential for payment technology providers to offer tailored solutions that address these specific needs.
What makes tech stand out when it comes to the needs of smaller banks?
A.M.: There’s no doubt that the marketplace has become more crowded with different payment platforms, but several factors can make a solution stand out for community banks. Key differentiators include ease of integration with existing systems, robust customer support and scalability to adapt to future needs. Banks need to carefully assess their options and determine which solutions align best with both their organizational requirements and their customers’ needs.
Leaders should ask themselves a few critical questions: Does the fintech partner share a similar risk appetite as us? Can they deliver the necessary integration and provide an experience that aligns with our brand? Is there a likelihood that the fintech will remain operational in the coming years? If not, what contingency plans do we have in place? Do they have experience working with other community banks? Addressing these questions can help banks minimize risk, thoroughly evaluate potential partners, and modernize their payment operations with confidence.
In addition to assessing vendors and payment solutions, financial institutions should also take the implementation and onboarding process into account. Do the integration capabilities offered align with your bank’s needs to expand payment options in a manner that suits operations and meets customer demands? Often, core offerings may be limited in this aspect, as legacy systems are designed for batch-based transaction processing and lack the flexibility needed for seamless integrations.
What are the regulatory requirements and how do you meet them?
A.M.: When it comes to offering new payment technologies, banks must navigate a complex landscape of regulatory requirements, including the Dodd-Frank Act, the Electronic Fund Transfer Act and various state regulations. Providers should be transparent about their adherence to regulatory standards and offer robust documentation that demonstrates compliance. Regular training sessions and updates on regulatory changes can further empower bankers to confidently integrate new technologies while ensuring alignment with legal requirements.
In our experience at Pidgin, we’ve found that spending time educating teams on the nuances of faster payments instills confidence for banks looking to expand their payments offerings. Adopting faster payments rails like FedNow and RTP Network is a once-in-a-generation occurrence, and the more we can provide guidance around the changes these new technologies present, the more productive our partnerships will be.