FinTechs lack in instant payment offerings

Digital-first consumers are increasingly driving today’s economy, making money mobility a top requirement for any financial service provider. Potential customers expect this capability, and the need to meet this growing demand is particularly strong for budding FinTechs keen to win consumers away from traditional banks.

The average FinTech account issuer barely gets a passing grade on money mobility, with an average index score of 53.5 out of 100, according to PYMNTS’ data. In practice, this means that FinTech account issuers have many opportunities to improve their customers’ experience – and in turn better engage and retain consumers.

For account holders, money mobility means more than simply sending payments by moving money out of accounts. It also means instant access to funds deposited into their account from any payment method. If FinTech issuers want consumers to feel confident using their offerings instead of a bank’s, they need to offer all the services consumers expect from traditional issuers.

These findings are part of “2023 Money Mobility Index,” a PYMNTS and Ingo money cooperation. The index is based on two surveys. The first was a census-balanced survey of 3,633 consumers across the United States, examining what consumers want and expect from the non-bank financial services companies they shop with, and was conducted between June 9, 2022 and June 23, 2022. The the second survey was conducted between August 3, 2022 and August 25, 2022, reaching 200 executives from FinTechs across the United States to reveal the level of customer satisfaction with the money movement options they offer.

Other key findings from the study include the following:

• Account holders are 51% more likely to report problems receiving funds than sending them out.

67 percent of issuers say their account holders experience problems receiving money into their accounts, but only 45% say their account holders experience similar problems sending money out of their accounts. The most likely explanation is simple: account holders want their money as quickly and with as few hiccups as possible.

• Top issuers have high customer satisfaction for sending and receiving moneybut security remains a challenge.

At least 67% of top performers say their customers have no problem using featured features for money, but only 23% of bottom performers can say the same. Similarly, 80% of all companies’ underperforming customers experienced problems receiving funds from individuals, which exceeded the 67% of customers with top issuers who had the same problems.

When it comes to security, even the best issuers have room for improvement: 60% of issuers report that customers depositing funds had trouble using security features, as did 33% of customers withdrawing funds.

• Instant payments are particularly valuable: the more instant payment options issuers offer, the greater money mobility customers have and the more customers will use their accounts.

Payment options are crucial to winning over and retaining customers, but not all payment methods are created equal when it comes to account holders. Instant payment methods are key. Our researchers found that FinTechs that offer more immediate payment methods provide smoother experiences and, as a result, earn higher index scores. Issuers that offer six or more instant payment methods, either for receiving or sending money, earn an average index score of 59.5, while those that offer two or fewer instant methods earn an average score of just 50.6.

To learn more about how FinTechs can improve customer satisfaction and experience when moving money in and out of accounts, download the report.