U.S. Bank Releases 2023 Payments Transformation Report

Survey of finance leaders finds adoption of payments technology is driving consumer loyalty and business profitability

Newly released U.S. Bank research explores how corporate finance leaders are preparing for future growth by innovating their payment acceptance strategies.

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The 2023 Payments Transformation Report surveyed 300 senior finance, treasury and revenue management executives evenly distributed among five sectors in the U.S.: retail, healthcare, lodging, restaurant and government. Respondents reported that emerging payments technology – like contactless, embedded and real-time payments capabilities – enhances business profitability, with almost two-thirds calling the use of modern payment options a competitive differentiator.

“The payments landscape is evolving at lightning speed and digital payment methods are quickly gaining traction with U.S. consumers,” said Jamie Walker, CEO of Elavon, one of the largest payments processors globally and a subsidiary of U.S. Bank. “More than three-quarters of retail-sector leaders surveyed believe positive checkout experiences are as important as product quality. Equally important is that payments technology delivers flexibility, simplicity, speed and security to both businesses and consumers.”

Card payments and cash are still king for most businesses but increasingly consumers are choosing tap-n-go payments using their contactless card and digital wallets as a more efficient option. Within two years, 60% of survey respondents say contactless or digital wallets will be the preferred payment method for consumers. The trend is especially steep when it comes to government-related payments (72% of respondents expect contactless cards to be the dominant payment method) and healthcare services (62%).

In two years’ time, respondents believe the percentage of consumers using paper checks to make purchases will drop below 5%, and Buy Now, Pay Later financing will be a routine choice for retail purchases and an emerging option for the lodging industry.

Convenience is first and foremost among the factors driving the adoption of payment processing technology by consumers. For business and finance leaders, improved convenience also equates to faster payments, improving cash flow.

“By embracing the convenient payment processing options desired by consumers, large businesses and government agencies can get paid more quickly,” Walker said. “We found that across all sectors, more than 75% of financial leaders are relying on payments transformation to feed into greater sales and greater profitability for their organization.”

Positive Payment Experiences to Drive Business Growth

The survey results found:

• Respondents hope that payments transformation will reduce operational expenditure (64%) and improve liquidity (63%). Even more expect positive impacts from improved employee experience (74%) and customer experience (72%);
• 62% of finance leaders said that the ability to offer modern payment options will be a competitive differentiator for their business;
• 78% of retail respondents say that a good checkout experience is as important a competitive advantage as having the best products;
• 51% of finance leaders are expanding their range of digital payment options;
• 47% of respondents are boosting spending on contactless devices.

Retail:

• In the retail industry, nearly half (47%) of executives expect Buy Now, Pay Later (BNPL) methods to be mainstream in two years, and 68% of retail respondents are planning to enable transactions in the metaverse.

Restaurants:

• 6 in 10 restaurant finance leaders are seeing increased requests from diners to use alternative payment methods like peer-to-peer (P2P), as well as mobile wallets;
• 70% of respondents from the restaurant sector said the ability to order and pay quickly influences a customer’s choice of restaurant.

Healthcare:

• 63% of healthcare-sector respondents said an easy and patient-friendly way of paying bills encourages quicker payment of account balances;
• 65% of healthcare finance leaders are exploring ways to expand payment acceptance by accepting digital payment types.

The U.S. Bank-commissioned survey, “Payments Transformation: What You Need to Know,” was conducted by FT Longitude, a Financial Times company, in June and July 2022. This survey follows two 2022 surveys by U.S. Bank, highlighting corporate and payment trends: The CFO Insights Report and Real-Time Payments Report.

About U.S. Bancorp

U.S. Bancorp with nearly 77,000 employees and $675 billion in assets as of December 31, 2022, is the parent company of U.S. Bank National Association. The Minneapolis-based company serves millions of customers locally, nationally and globally through a diversified mix of businesses: Consumer and Business Banking; Payment Services; Corporate & Commercial Banking; and Wealth Management and Investment Services. Union Bank, consisting primarily of retail banking branches on the West Coast, joined U.S. Bancorp in 2022. U.S. Bancorp has been recognized for its approach to digital innovation, social responsibility, and customer service, including being named one of the 2022 World’s Most Ethical Companies. Learn more at usbank.com/about.

About Elavon

Elavon is owned by U.S. Bank (NYSE: USB), the fifth-largest bank in the United States, and provides end-to-end payment processing solutions and services to more than 1.3 million customers in the United States, Europe, and Canada. As the leading provider for airlines and a top five provider in hospitality, healthcare, retail, and public sector/education, Elavon’s innovative payment solutions are designed to solve pain points for businesses from small to the largest global enterprises.

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