COMMENTARY: Five Key Trends in Payments to Watch for As 2018 Unfolds

As the new year eases well into its second month, here are five important technology developments that will shake up key payments markets in 2018.

B2B payments will finally go digital
Perhaps further behind in the fintech curve than they should be are business-to-business payments. This is often attributed to the complex nature of these payments. Most transactions involve multiple stakeholders, are usually linked to payment orders and budgets, and are managed manually. Now, though, things are starting to change. The check still holds as the most common method of payment acceptance in B2B payments in the United States, but only just. The Association for Financial Professionals has found that in 2004, 81% of B2B organizations paid by check, but by 2016 this number had shrunk to 51%.

The U.S. government has already mandated that, in 2018, all invoicing for business-to-government payments will be electronic-only. This is bound to have a roll-on effect into the B2B market as a whole. In 2018, expect more chief financial officers to begin to realize the efficiency benefits of digitizing B2B payments.

The spotlight will be on health care
According to eHealth’s analysis of the health-care marketplace during the 2017 open-enrolment period, the average annual deductible was over $8,200 for a family plan, accounting for a 3%, or $249, increase on the previous year.

Maximizing the chance of capturing patient payments means providing a friction-free payment process. Recent statistics show over half of patients prefer to be billed electronically. In fact, 79% of patients are happy to provide their email address for billing and correspondence, yet 90% of practices are still mailing paper-based statements. Health-care providers will need to accommodate a broad variety of electronic options in 2018 or face missing out on crucial revenue.

The ARM market will feel the health-care strain
The reality of a rising number of patients with high-deductible health plans or PPOs means more health-care payments will fall into accounts receivables management (ARM). Much like providers themselves, health-care ARM organizations need to be able collect payments online using all payment types, including the ability to accept health saving account (HSA) and financial savings account (FSA) payments.

The BillingTree annual ARM industry report in 2017 found the number of ARM organizations processing payments from HSAs/FSAs had increased 10% from 2016. Expect this number to grow in the year ahead as patient, provider, and accounts receivables adjust to the sharp rise in patient responsibility.

Card brands will level the property-management playing field
To compete with debit account and automated clearing house rates, costs for settling rent payments and community fees with cards need to come down.

Already, certain card providers are creating new rate categories for apartment due payments and rentals. In 2018, this will open the door to the availability of more electronic payment options, which offer convenient ways for tenants to settle rent and community fees. That will increase revenue for property managers and improve customer service.

Credit unions will take to technology
For credit unions, 2018 will carry a familiar challenge: staying competitive with the big banks. This means creating competitive offerings while delivering a personalized service to keep its members happy in the hope of luring them away from larger institutions.

When it comes to technology, the size of credit unions can actually become an advantage. Smaller businesses have smaller infrastructure, so integrating new technologies takes less time. That means they can quickly accommodate the evolving needs of a tech-savvy membership base.

In 2018, we will witness more credit unions turning to technology providers to help expand their payment solutions, a trend that was identified by respondents to a Q4 BillingTree survey on financial-services technology adoption. The survey found 66% of respondents plan to adopt new payment technology in 2018, a steep rise from just 14% the year before.

—Dave Yohe is vice president of marketing at BillingTree Inc., Phoenix.