An interesting article by Phoenix ESP Payments Research Group
(Salisbury, MD) October 6, 2006 - Banks expecting a gradual migration of check processing to remote deposit capture (RDC) to trickle down to their smaller business customers after adoption at the large corporate level need to think again. Close to 10% of small businesses and SOHOs (small office/home office) in the manufacturing, wholesale and retail sectors are already using RDC or have concrete plans to begin using RDC by the end of 2007. And with awareness of the technology already at 50% among these small companies, the actual adoption rate for these segments in 2007 is likely to be substantially higher.
“This technology promises to be as disruptive to paper check processing over the next 18 months as was the conversion from paper to electronic processing of credit card transactions in the mid-1980s”, says Leon Majors, President of Phoenix ESP Payments Research Group. “Though the percentages of small businesses using or planning to use these services right now may seem small, it is important to keep in mind that they represent hundreds of thousands of companies in only three industries.”
These results from just one of a series of market studies of small businesses recently completed by Phoenix ESP Payments Research Group reveal potential for new electronic payment and payment processing methods that far exceeds original expectations and perhaps the capability of the industry to deliver. “The banking industry has yet to establish standard pricing or availability for the mass marketing of these services but the small business community already expects this new array of electronic receivables services to be available in the normal course of business”, cautions Majors.
Majors also points out that, to date, just 40,000 RDC terminals have been shipped by manufacturers, of which about 30,000 have been installed. “A handful of banks across the country, large and small, have taken the lead in providing RDC services to their customers,” adds Andy Brown, VP Small Business Payment Strategies at Phoenix ESP, “and they will have an edge because this is precisely the type of service that cements a strong relationship between customer and provider.”
Phoenix ESP research measured substantial growth over the past year in the numbers of small firms planning to use ACH and image capture by 2007. In addition to RDC interest and activity, more than half of SOHOs and small businesses in the industry segments surveyed by Phoenix ESP are familiar with e-check services (conversion of paper checks to ACH transactions) and just under 10% of these firms are already using e-check services or planning to begin using them before the end of 2007.
Phoenix ESP conducts three extensive payments research projects annually in the small business market: Small Business Banking Services, Small Business Credit Card Monitor and Small Business Retail Merchant Study. Collectively, these projects encompass almost 3,000 telephone interviews with owners/managers of businesses in six industries with revenues between $100k - $9.9mm. (Companies with revenues between $10mm - $250mm are covered in separate studies.) The data reported here are drawn from the recently completed Small Business Banking Services study.
ESP Payments Research Group, a division of Phoenix Marketing International, offers full-service quantitative and qualitative research and analysis across all types of payments systems products and services. Consulting professionals with unmatched expertise in payment systems and primary research, provide solutions for clients at leading retail and corporate financial services providers and technology vendors serving the financial services industry.
Phoenix Marketing International is one of the fastest growing top-50 marketing research firms in the U.S. and partners with many of the largest companies in the financial services, consumer package goods, automotive and travel, leisure & entertainment industries worldwide. In addition to industry expertise Phoenix has dedicated analytical groups leading the industry in advertising and brand analytics, multi-cultural expertise and direct marketing list optimization.
“This technology promises to be as disruptive to paper check processing over the next 18 months as was the conversion from paper to electronic processing of credit card transactions in the mid-1980s”, says Leon Majors, President of Phoenix ESP Payments Research Group. “Though the percentages of small businesses using or planning to use these services right now may seem small, it is important to keep in mind that they represent hundreds of thousands of companies in only three industries.”
These results from just one of a series of market studies of small businesses recently completed by Phoenix ESP Payments Research Group reveal potential for new electronic payment and payment processing methods that far exceeds original expectations and perhaps the capability of the industry to deliver. “The banking industry has yet to establish standard pricing or availability for the mass marketing of these services but the small business community already expects this new array of electronic receivables services to be available in the normal course of business”, cautions Majors.
Majors also points out that, to date, just 40,000 RDC terminals have been shipped by manufacturers, of which about 30,000 have been installed. “A handful of banks across the country, large and small, have taken the lead in providing RDC services to their customers,” adds Andy Brown, VP Small Business Payment Strategies at Phoenix ESP, “and they will have an edge because this is precisely the type of service that cements a strong relationship between customer and provider.”
Phoenix ESP research measured substantial growth over the past year in the numbers of small firms planning to use ACH and image capture by 2007. In addition to RDC interest and activity, more than half of SOHOs and small businesses in the industry segments surveyed by Phoenix ESP are familiar with e-check services (conversion of paper checks to ACH transactions) and just under 10% of these firms are already using e-check services or planning to begin using them before the end of 2007.
Phoenix ESP conducts three extensive payments research projects annually in the small business market: Small Business Banking Services, Small Business Credit Card Monitor and Small Business Retail Merchant Study. Collectively, these projects encompass almost 3,000 telephone interviews with owners/managers of businesses in six industries with revenues between $100k - $9.9mm. (Companies with revenues between $10mm - $250mm are covered in separate studies.) The data reported here are drawn from the recently completed Small Business Banking Services study.
ESP Payments Research Group, a division of Phoenix Marketing International, offers full-service quantitative and qualitative research and analysis across all types of payments systems products and services. Consulting professionals with unmatched expertise in payment systems and primary research, provide solutions for clients at leading retail and corporate financial services providers and technology vendors serving the financial services industry.
Phoenix Marketing International is one of the fastest growing top-50 marketing research firms in the U.S. and partners with many of the largest companies in the financial services, consumer package goods, automotive and travel, leisure & entertainment industries worldwide. In addition to industry expertise Phoenix has dedicated analytical groups leading the industry in advertising and brand analytics, multi-cultural expertise and direct marketing list optimization.
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