Banks can shift the payment flows of their business customers into a customer acquisition channel by creating a co-branded recipient account. These accounts are issued by the bank, wrapped with the merchant client’s branding and offered to payment recipients as the quickest way to get their money, according to the report.
For recipients, a co-branded recipient account provides a solution from someone they trust – the sender – and a way to get their money quickly. For senders, it provides a way to deepen their relationship with the recipient.
For banks, co-branded receiving accounts are a way to acquire customers with the help of the sender’s brand, hold deposits and card spending, and offer an entire ecosystem of savings, credit, and lending products to go with the account.
Without this offer, banks lose the opportunity to convert payout recipients into customers.
“A regional bank that manages $4 billion in annual payments volume runs a $4 billion annual outbound pipeline to its competitors, a pipeline that, in many cases, is not fast,” the report said. “Every payment is a deposit that withdraws, a customer that the bank will never acquire, and an instant payment that the bank could have had.”
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Banks adopting this strategy must first focus on the category of recipients for whom the return constitutes income, who are therefore in dire need of it, and who receive their receivables frequently. These recipients are more likely to readily accept a new account that allows them to get their money faster. They are also the ones who will receive the highest lifetime value, according to the report.
The report indicates that banks provide the account at the moment of payment; Using the sender’s brand as a bridge to the recipient’s trust; Make the account the default account in the Select Destination step; Make the account useful beyond checkout; And then build the ecosystem on top.
“The first account is the door,” the report said. “Once the recipient becomes a customer, the bank has a funded relationship, a known earnings profile, a transaction history and a trusted channel, making them an extraordinarily qualified prospect for credit cards, savings and lending, and small business products.”
