Why Email as a Payment Vehicle is a Nonstarter

by Gordon Sellers on June 12, 2013

shutterstock 1347157461 Why Email as a Payment Vehicle is a NonstarterChecked your email lately? Statistics show you probably have. One survey found Americans spent 33 minutes a day on email last year, up from 26 minutes just two years earlier. Email is being used increasingly for marketing messages and other financial communications, but when it comes to making payments online, email is – with one notable exception – a nonstarter.  The reasons why point us to a better solution.

Corporations of all kinds are seeking to interact with consumers by digital mail. And why not? The average American last year spent more than 3 hours a day online. While that’s still less than the more than 5 hours they spent in front of the television, it’s more than they spent listening to the radio, playing video games and reading newspapers combined. The time-spent-online numbers will only grow with the popularity of tablet computers. But that’s where the good news ends for email, though, for several reasons.

1. Consumers are tired of junk emails.

Marketers were responsible for 70 percent of the spam complaints in 2012, and inbox placements declined 5 percent from a year earlier. Of those complaints, most were filed about newsletters consumers had previously elected to receive; and electronic newsletters make up nearly a third of all emails in US inboxes. Cutting through the clutter is becoming more and more difficult, and judging by the numbers, consumers are becoming more discerning about what they receive. Both of those developments don’t bode well for email as a payment vehicle.

2. Email has gone mobile.

More than 40 percent of emails now are opened on mobile devices, which would indicate consumers want to stay up to date with quick updates on the go. That doesn’t sound like a scenario for paying a utility bill.

3. Younger consumers think email is for geezers.

All kinds of research shows how tied many people are to their email accounts, especially at work, but the strength of that bond weakens considerably as younger people are considered. This demographic is far more comfortable with the more immediate communications of Skype, Facebook Chat and text message.

Despite all the trends conspiring against it, one email payment vehicle is growing. Of course, that’s PayPal, which saw sales growth of 18 percent in the first quarter. But that was down from 32 percent in last year’s first quarter, and PayPal took in less money from each transaction. Here’s the other thing about PayPal: It collects 4.4 percent and more from each transaction. That’s not a percentage any large corporation would be willing to give up to collect an online payment.

Systemware Gateway fuels digital delivery

There is a better way, and that’s digital delivery. With digital delivery, corporations can send bills, statements, notices and other customer correspondence through an ever-expanding list of channels — digital mailbox providers, e-bill payment services, corporate websites and portals — to customers. Corporations are now able to communicate with customers through the preferred channel or channels. It’s different from email in that it’s a secure system that links known senders with known recipients.

The value of digital delivery is in helping companies unlock high-value information delivered digitally through any number of channels to recipients inside and outside of the enterprise. To date, the biggest challenge has been in finding one solution that addresses the complexity of corporate content, delivery channel requirements, consumer preferences and regulatory compliance.

Our Systemware Digital Delivery Gateway addresses this problem; and it’s one solution, one point of integration, delivered to any desired channel. The Gateway not only helps corporations streamline operations and enjoy major savings, but it opens up for them new channels for customer interaction.

Digital delivery represents a major advancement in customer correspondence. It’s the answer to a problem that can’t be solved by email.

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