Some 90 million U.S. consumers received mass payments in June 2021 alone, yet less than 60% of them were offered a choice in payment method. It reveals a major opportunity for companies doing mass payouts to add payments preference to the mix, while cutting costs in the process.
That’s one of several key takeaways from The Mass Payment report, produced in collaboration with Tango Card, for which researchers surveyed a census-balanced panel of more than 3,900 U.S. consumers about mass payment experiences and preferences.
Noting that “only 58 million mass payment recipients in the U.S. are given the option to receive the payments the way they prefer, yet 43 million recipients would be willing to pay extra for the chance to do so,” the new study points to an unmet demand that can benefit payer and payee.
As the study states, “mass payment recipients would prefer to have a say in how they receive payments and would be eager to pay extra for the ability to do so,” with the study finding that 48% of the 43 million U.S. consumers who received at least one mass payment in June 2021 are “very” or “extremely” willing to pay a fee to receive mass payments their way.
See also: The Mass Payment
A Sizable Market Opportunity
With mass payments being widely used to disburse incentives, rebates, referrals and reviews during the pandemic and resulting digital shift, more companies are looking for better ways to get these funds to recipients in faster, lower-friction ways that align with their preferences.
For example, researchers found that consumers received $26 billion in rebates in June — the biggest total dollar volume increase of any category studied — while the average mass payout in June “clocked in at a dollar value of $157.34, compared to an average value of $151.33 last December. This totals $21 billion more in mass payments in June than just six months earlier.”
As to how consumers want to receive these funds, the Mass Payment study states that “digital wallet payments are still consumers’ first choice when it comes to receiving mass payments. Forty-nine percent of all mass payment recipients say they would choose to receive mass payments via PayPal, mobile wallet or direct deposit if they could, with PayPal being the most in-demand digital wallet. Twenty percent of all mass payment recipients would pay to receive payments directly to their PayPal accounts.”
What Consumers Will Shell out for Mass Payment Choice
A fascinating aspect of mass payments is the number of consumers willing to pay to get them. A big problem that researchers uncovered is the fact that not much choice is being offered yet.
Per the study, “36% of June’s mass payment recipients were given no choice in how they received those payments, while 43% were able to choose between just two or three methods. Only 21% were offered a choice from among four or more methods. In other words, 32 million mass payment recipients in the U.S. are given no option regarding how they collect those payments.”
With over 30 million consumers wanting that choice and not getting it, things are poised to change.
As the Mass Payment study concludes, “Not only would 52% of mass payment recipients pay a 1% added fee to receive payments using their preferred methods, but 49% would be willing to pay as much as a 10% added fee to do so.”