As payment types proliferate, moving money here, there and everywhere on demand — the new machinery of money mobility — should be making things easier, and it is. Sort of.
Problem is, for all the options at our disposal, money mobility isn’t yet moving at the pace of change that defines payments in 2022. Fortunately, it’s fixable, and fixers are working on it.
To better understand money mobility issues businesses contend with and how they’re being solved, PYMNTS’ Karen Webster called on Ingo Money Executive Vice President and Chief Product Officer Lisa McFarland and Senior Vice President of Payments Dennis Mullin.
Noting that many companies see money mobility as just another in a long list of API integrations, McFarland said, “The real complexity with processing payments, whether that’s inbound account funding, deposit payments, outbound disbursements, payouts, transfers … lies in the day-to-day operation, making sure it works consistently for your customers.
“It’s the exceptions that make it challenging, and the exceptions are not unusual.”
Illustrating with a use case, Mullin described a small business lender on the Ingo Money platform disbursing loan funds for highly specific uses. Sounds deceptively simple. But the lender has very specific restrictions on the account types to which a customer can transfer funds, which requires highly specialized account enablement and routing capabilities.
“In other enablement profiles, like we have for some of our insurance clients, we set timeframes for delivery. If the customer that they’re attempting to deliver to doesn’t respond in a certain amount of time, we’re doing a check disbursement as a default payment method,” to comply with regulated payment deadlines that vary by state.
It’s a thorough approach with a suboptimal solution — the paper check as last resort — which is why FinTechs like Ingo go deep on choice, enabling wallet providers, push to debit and ACH.
All that choice is both solution and problem, not always in that order.
As McFarland said, “the choice component … giving consumers the ability to receive money anywhere they choose or initiate inbound funds from any account … that means you’re talking about more than one connection, so you take the complexity associated with a given money mobility rail, then multiply it across enabling various payment choices and payment channels.”
With the average consumer now juggling multiple finance apps on their smartphones, money movement on the front end may look easy to the user, but it’s anything but on the back end.
Being able to facilitate seamless money movement between and among accounts is a compelling value prop, McFarland said, but in “enabling that, there’s the complexity of the networks, there’s the complexity of security and risk as well.
“All these things factor into having an operational process that is effective and scalable across your business.”
Ingo Money takes a collaborative approach, delving into data from consumer demographics to competitors, in the B2B case, and benchmarking data to arrive at the most effective approach.
“Then you get to a place where you launch something … and you’ve got an ability to add other rails or remove rails as you see fit to best meet the needs of your customer base,” she said.
That means that Ingo Money does the heavy lifting for the business, which in all probability isn’t in the money mobility business and just needs it to work reliably and securely.
Mullin said, “We’re looking to try to fill the need for that entity to be able to move money without them having to become payment experts or experts in how to build and maintain all these integrations.”
Here again, complexities come into play as clients detail what they want to accomplish via what payments modality, partnerships, banking relationships, risk profile and more.
“Some clients are a bit more conservative, want to start a little bit slower with one channel and then expand,” Mullin said. “Other ones want to go big bang, then maybe change their profile a little bit based on what they’re seeing after a period of time.”
Whatever the case, issuers must keep the objectives of payers and receivers firmly in mind, and be able to move on opportunities quickly, switching on mobility features as needs change.
But in a world where instant money is becoming just money, this gets complicated.
McFarland said, “With real time-time payments, the sender, the originator, is liable for the transaction.
“As a consequence, it behooves you to ensure that you are actually paying the right person, that you’re funding an account that that individual actually owns so you’re not subject to potentially even friendly fraud later.”
Don’t Go It Alone
Businesses with what McFarland called a “more ad hoc relationship with their customer, or are looking to move significant sums of money” are in the most need of more accurate and secure money mobility partners.
“It’s less acute for those companies that are moving small dollar transactions, frequently on a recurring basis with the same customer set. Risk capabilities and the configurations on our platform are really designed to support that whole array of potential customer needs.”
Risk capabilities and configurations matter either way, because, as she added, “Inbound funds are generally, for issuers, far [riskier] than an outbound transfer that’s a me-to-me transaction. How risk rules get applied is very important. Understanding where the risk lies is often intriguing to our clients because you don’t always know that until you’ve experienced it.”
Given that anxiety-producing fact, money mobility is not a DIY project. It demands expertise. Stitching together a solution using apps and tools is messy, it’s risky, and it takes forever.
“It really extends your cycle time, as opposed to being able to take advantage of a prebuilt platform that is fully connected, that’s got risk management capability built in,” she said.
Mullin said so-called “happy path” reporting on APIs too often “belies the level of interrogation and understanding you [actually need] around the payment network processing underneath it all,” enabling forensic analysis and driving “a sense of urgency around resolution.”
Staying compliant is always a prime concern, and with war in central Europe, a malingering pandemic and frequent rules updates, Mullin said, “There are a number of things you have to be able to react to and react to quickly.”
“To the extent that we can, we try to buffer that for our clients to ensure they have to do less in order to keep their business running.”
But compliance isn’t usually what drives a company to seek a better money mobility solution. More often, it’s their own experience trying to do it themselves that’s the big convincer.
“They go trying something, they’re integrating a payment rail, they’re trying to get up and running,” McFarland said, “and it’s after that integration when they start to recognize, wow, this does not work as we expected, which is not to say it doesn’t work as advertised.”
In the end, it’s up to each business to decide what they want the money mobility experience to be. “We’re here to enable that,” she said. “Key for us is understanding what the goals and objectives are, how we can meet those and to provide an informed market view and experience.”