The rise of networks in the digital ecosystem

GM Spotlight: Don Layden, President for NCR Payments & Network, shares his insights on how networks are a last-mile partner that can provide access and scale into new markets and serve as an essential touchpoint for financial inclusion.

Networks are a vital connector of global commerce

It is no surprise that consumers are shifting to digital payments at an accelerated pace. But the rising role of networks in the payments ecosystem often gets overlooked and misrepresented. 

Networks are emerging to be the last-mile partner bridging digital and cash. They form a closed loop through which cash travels both in and out of the digital space, making them a vital connector of global commerce. This explains why retailers, financial institutions (FIs), neobanks, fintechs, and other businesses embrace the value created by leveraging nationwide networks like Allpoint with ATMs in places consumers shop every day. 

But partners want more. They want simplified offerings with more optionality and endpoints. They want a transformative technology partner with the expertise and scale to bundle solutions and extend the network to multiple devices and terminals. They want omnichannel solutions for transactions of all types.

Helping financial institutions compete cost-effectively in the digital banking space

The digital revolution is creating a fundamental transformation. Accelerated by market forces such as the COVID-19 pandemic, FIs are adapting fast to meet consumer demands for convenience, digital engagement, self-service, and fee-free.

As they work through this process, FIs re-evaluate what is and is not critical to their channel infrastructure. The transformation visibly embodies the shrinkage of branch networks, reduced operational costs, and redeployed capital to digital initiatives. The pandemic brought all three of these activities into sharp focus, which led to mass branch closures, some temporary and some permanent, while highlighting the need to run lean.

As branch lobbies and ATM vestibules closed, consumers in less populated areas had to travel much longer distances to visit an ATM at another branch. Also, urban ATM users found themselves in long lines for the ATMs that were still accessible. This inconvenience prompted FIs to rethink channel distribution strategies that offer greater flexibility for account holders to enjoy convenient and surcharge-free access to their cash.

Networks like Allpoint have become a critical component of a bank’s omnichannel strategy and an essential face for its account holders. The network helps FIs grow market presence with no capital investment, eliminates new ATM deployment expenses, reduces overhead costs, and helps them attract new customers who crave choice. 

Bridging the digital and physical worlds for online banks

The digital revolution has spurred the growth of online banks, and networks are helping to bridge the gap between traditional and digital banking and provide access and scale into new markets.

Neobanks and fintechs that have entered the banking space are looking for ways to connect the digital with the physical world. They also want to stand out with scale at the flip of a switch, making Allpoint’s 55,000 endpoints an attractive solution. The ubiquitous network provides them with national coverage and gives them the ability to launch quickly and easily, physical to digital APIs, no need to invest in expensive physical footprint, and convenient and surcharge-free ATM access for their customers.

Fintechs have also become a massive driver of financial inclusion by catering to the unique needs of unbanked and underbanked consumers who are underserved by traditional banks.

Maximizing retail foot traffic and customer satisfaction    

As the market for financial solutions changes rapidly, driven by digital transformation and evolving consumer needs, major retailers want to offer consumers more convenient and high-quality financial access and services.

Forward-thinking merchants recognize that the modern consumer wants financial access everywhere – where they work, shop, and naturally, on their phones. By offering Allpoint in their stores nationwide, retailers can provide consumers even more reasons to visit the store to not only purchase groceries and convenience items but for a growing list of network services that extend beyond cash withdrawal.

Innovating to do more to keep our customers ahead

We are working to deliver expanded capabilities that consumers can access where they shop every day. Consumers will be able to do transactions like depositing cash or check, paying utility bills, redeeming gaming awards, accessing government benefits, transferring money, and even buying and selling cryptocurrency – all while picking up their groceries or medical prescriptions.

Innovative solutions like NCR Pay360 allow businesses of all kinds to provide consumers with the ability to convert a digital value to cash, or vice versa, using a numeric code. For example, a company that offers trade-in services for items like used mobile phones can pay their customers through an NCR Pay360 code, which the customer can redeem for cash at the ATM.

These and other new capabilities like offering consumers the ability to use bitcoin as a form of payment add new revenue streams for businesses and serve consumer needs in the fast-growing cryptocurrency market. 

Cash trends and promoting financial inclusion through payment choice

We can’t talk about keeping our customers ahead without addressing financial inclusion and the millions of consumers without adequate access to banking resources and who rely on cash every day.

Recognizing that cash as a payment method is the bedrock of financial inclusion, governments worldwide are leading the way by introducing legislation and enacting laws to prohibit merchants from refusing to accept cash. Not only do these laws support millions of cash-dependent consumers, but they also support small business owners who find it more economical to accept cash than cards because of the interchange fees associated with each digital transaction.

The reality is that the value of cash in the digital economy is underrepresented mainly because digital platforms make false assumptions about consumer preferences and overlook data showing the resiliency of cash and its role in promoting financial inclusion. We firmly believe that everyone deserves to participate in our economy using the most convenient payment choice, and cash and digital economies benefit from being part of the same ecosystem.