Feb
18
Crazy humans. Seems like we’re never satisfied.
If you don’t believe me, ask Abraham Maslow. According to his Hierarchy of Needs, which hardly needs introduction, as soon as we satisfy basic needs like air, water, and food, we up our expectations to things like security, revenue, health, and possessions. From there we seek friendship and belonging. Then respect and freedom. And then self-actualization.
One human drive that Maslow seems to have overlooked, however, is instant gratification. When we want something, we want it now. No matter if only a couple of decades ago we were satisfied with a quaint “Please allow four to six weeks for delivery”; nowadays, every time industry figures out how to speed up delivery of that sweater, mug, pizza—or payment—we only want it faster.
Take, Amazon, which is getting really serious about same-day delivery. CFO Brian Olsavsky, as reported by PYMTS.com …
… told investors that the costs of one-day shipping during Q4 had come in “slightly under” $1.5 billion, and noted that Amazon plans to spend $1 billion more on the initiative during Q1, and “again in [the second quarter].” He added that he fully expects that “we’ll start to lap this,” and costs will become more efficient as volume grows, new routes are put into place and additional delivery technology is added into the mix.
It seems that it was only impressive for a little while when Amazon could deliver that mug in a week, and later, in a few days. It will be interesting to see how online merchants who don’t have $2.5 billion to invest over six months toward speeding up delivery will compete.
There aren’t many industries that our desire for instant gratification hasn’t hit.
We want our pizza now. And it better arrive hot. Not only that. We want to know how close the driver is to our home right now. It’s no wonder that, with its commitment to speeding things up and keeping customers informed, Domino’s has long claimed to be “a technology company that happens to make pizzas.”
And we’re no longer content with just pizza delivery. DoorDash and Uber Eats have trained us to expect dinner of any sort, from any restaurant, ready to eat, and arriving in record time. This has brought about an unexpected problem for parents. A recent Wall Street Journal article highlights a new trend among teens—an annoying one, according to their parents—of ordering food online when the planned family dinner doesn’t appeal.
Our desire for instant gratification extends to music, audiobooks, and books. We want to download them now. And we want to stream movies now. We binge watch because we want the season finale now. Indeed, our society only recently coined binge watch with the advent of streaming. A related new term is Netflix cheating, which Urban Dictionary defines as “Netflixing a TV series with your spouse/friends/significant other, and watching episodes while the other party is out.” Apparently Netflixing as a verb has made its way into the lexicon as well.
We want McDonald’s to log our order before we arrive and start on it the minute we pull into the parking lot. We want grocery stores to fill a (literal) shopping cart, ring up the total, collect our payment, and have our groceries bagged and ready for pickup when we arrive.
Even home buying is going digital. Online real estate brokers like Prevu (which, if anyone cares, is French for “foreseen”) and Rex (while I’m at it, that’s Latin for “King”), whose home pages look remarkably alike, speed up the process by letting buyers browse properties online, involving an agent only when they’re good and ready. Agents are not commissioned but salaried employees. Both services return two-thirds of the buying agent’s standard commission to the buyer.
These days I am loath to declare any product or service impossible to buy and sell online. It wouldn’t surprise me if in time we figure out how to stream haircuts, pet grooming, and carwashes.
Instant gratification in the payments world
Not to be overlooked, we want our funds to show up in real time. No more of this two to three business days stuff.
Hence services like Zelle, Venmo, Square, Quickbooks, and others are introducing instant or near-instant deposit services. This is, in fact, an opportunity for them to increase fee revenue, since these companies can tack on an additional fee for accelerating the process.
Not to be outdone, Mastercard has introduced its Bill Pay Exchange, which “which will enable real-time payment confirmation and automated reconciliation for the biller,” and Visa is promoting Visa Direct, which “enables fast payments to over a billion cards worldwide.”
Notwithstanding my leading the prior paragraph with “not to be outdone,” well, Fiserv may well be outdoing them. Its new CheckFree® Next™ incorporates intuitive suggestions and increased automation. Two top 10 U.S. financial institutions have already piloted it. According to a Fiserv press release,
The real-time capabilities of CheckFree Next [already] include instant notifications and, later in 2020, will include real-time money movement …
and
… allow bill payers to receive enhanced notifications that allow payments to be made in real-time and instantly reflected in their accounts.
Same Day ACH transactions are steadily on the rise. They reached $51 trillion in 2018. Expect to see the momentum increase when per-transaction limits next month increase to $100,000. And in March of next year, a new rule will allow “Same Day ACH transactions to be submitted to the ACH Network for an additional two hours every business day.”
We haven’t yet reached a point where payments arrive before they’re sent. But at this stage I wouldn’t rule out anything.
Disclosure: I work for Fiserv. Who could blame you if you envy me?