Ingo Money CEO: Gaming May Be Ace in the Hole for Instant Payments

It’s a paradox, to say the least.

Consumer demand for instant payments has climbed higher than ever.

Ingo Money CEO Drew Edwards told PYMNTS’ Karen Webster that at first glance, it’s the use cases where the consumers need the funds right now that are proving the most popular for instant disbursements — think FEMA funds, for example.

As Edwards noted to Webster, a key use case that could spur a greater embrace of digital payouts may lie with gaming and online sports betting.

Across the board, there’s a desire for payouts to be done digitally and in real time. Nearly half of U.S. consumers who receive disbursements would choose to receive them via instant payment rails if they could.

But here’s the paradox: Senders are beginning to take the instant option away, at least in some cases.

As measured by PYMNTS and Ingo, 22% of consumers received at least one non-government disbursement between July 2021 and July 2022. As many as 17% of the disbursements were done across instant payment rails.

While the above examples offer evidence of progress, Edwards noted that the lack of speedier progress boils down to one key word: availability.

“I would blame that lack of availability on legacy processes at large enterprises that are built around checks and ACH, and also on system and tech resources,” said Edwards. But there’s also the uphill battle of fighting against payments methods that have been entrenched for decades. Writing checks is universally acceptable and ACH payments are generally recurring transactions, with credentials already on file.

“Offering choice, and instant options within that choice, is a different type of interaction between payor and payee,” Edwards said. Peer-to-peer (P2P) managed to solve it via apps, but there are layers of complexity when corporates are added into the mix.

And yet, it’s hard to fathom how instant payments could reach critical mass when they’re being reined in a bit.

Dig a bit deeper into the numbers, and it turns out that consumers were 3.5% less likely to be given a choice in how to receive disbursements in 2022 than they were in 2021. Consumers were allowed to choose their receipt method for only 68% of the disbursements they received this year. That means options are being removed — not added.

“If you’re one of these companies that have decided to build out and stitch these rails together yourself, you may be realizing that it’s expensive to maintain and pulling back on some options,” he said.

Indeed, cost is the factor that drives at least some players to reduce payments optionality. In doing so and in winnowing down payments choice, Edwards said ubiquity winds up getting reduced, too (which hurts, well, everybody, eventually).

At this point, the check alone can make the claim for ubiquity in B2C and B2B transactions — as Edwards noted, pretty much anybody can send or receive a check. But for the firm that spends $5 to draw up, print and mail out the $1.58 check — well, the PayPal model becomes cost effective. Consumer experience with P2P opens the door to a comfort level with instant disbursements, and eventually those faster offerings will become mandatory.

Some Pockets of Growth

A measured pace might be the industry trend, but as Edwards noted, there are any number of providers and platforms (such as Ingo) that are seeing merchants actively endeavor to add payments choice.

Other verticals making the shift to digital payments — and by extension, instant payments eventually, if they are not there yet — includes the legal system, which traditionally has been mired in paper checks. Healthcare is ripe for digitization and instant payouts, as is insurance.

“But insurance, especially, has a lot of ground to cover,” said Edwards, “because I am not aware of a large insurance company that is fully digitized for all of their payouts. They are going use case by use case to build bridges between legacy tech and modern payouts.”

For the insurance firms that are able to offer at least some instant payout, consumers pick that option 75% of the time. At a high level, in the movement to instant payments, progress is being made — just not as quickly as some might prefer, and not everywhere all at once, obviously.

With commentary on the payouts themselves — and where instant is gaining traction — Edwards noted that traditionally, consumers tend to opt for cash payouts in higher percentages from gaming operators, due to the relative anonymity of those payouts. But, as Edwards said, Ingo is finding demand within the gaming space, where push to debit is garnering particular interest from consumers.

“It’s an expectation,” he said of instant payouts, “where we see a lot of people flipping from [gaming] provider to provider to provider, where there are any number of incentives and games.” The speed of the monies paid out becomes part of the allure.

Though the stats show relatively low penetration of instant payments, Edwards said there’s reason for optimism.

“If you actually step back and realize this all started just a few years ago — four or five years — and the awareness and adoption we are seeing — it’s actually phenomenal,” said Edwards, who added that “there’s a pretty rapid cycle of adoption and transformation that is happening.”