The Executive Suite: 3 digital payment trends that healthcare providers need to know

A streamlined digital experience is something consumers have come to expect in every area of their lives – yet traditionally healthcare has lagged in this area. Patients want the convenience that comes with digital tools, which is why providers must embrace technologies that improve the digital experience for their patients, physicians and staff.

Over the years, survey after survey has illustrated patients’ desire for new ways of financially engaging with the healthcare system. For example, one recent survey of U.S adults found that 84% said healthcare needs more streamlined payment systems, while 65% reported that billing for medical expenses was too complicated. Seventy-seven percent of respondents said that technology for healthcare needs to be closer to what they personally use in other areas of their life.

Another survey of more than 1,000 adults in 2020 revealed that 52% said they were either slightly (25%) or signiﬁcantly (27%) more stressed about their medical bills than they were about care, while 48% reported havingbeen late on a medical bill in the prior year.

Further, a recent survey from Sphere revealed that 82.5% of all patients say that the ability to pay medical bills online makes their lives easier, and only 7% find online bill payment more challenging than other options. Despite these consumer preferences, 89% of patients still report receiving paper billing statements.

Taken together, these surveys reveal what many in the healthcare technology industry have for years implicitly understood: Too many of today’s billing and payment processes are simply not serving the needs of today’s patients who have come to expect more consumer-friendly treatment from their healthcare providers.

Fortunately for providers, some changes loom on the horizon that could begin to reverse this trend. Following are three digital payment trends that have already begun and will continue to accelerate in the coming years.

The continued rise of contactless payments: In recent years, most merchants have migrated towards the acceptance of chip-enabled (also known as “EMV-enabled”) cards and away from the traditional swipe-enabled option. What many consumers don’t realize is that there is no mandate or requirement around use of chip cards; rather the change occurred as a means of shifting potential liability from merchants to banks. (If a criminal skims credit card information from a merchant’s EMV terminal and then uses that information for a purchase with another merchant that does not have EMV capabilities, the second merchant is liable for losses. However, if the second merchant does have EMV capabilities, liability is with the card issuer.)

A similar change is likely to happen in the future, but this time it will be a movement away from chip-enabled cards toward contactless, antenna-enabled cards, also known as NFC (near-field communication) cards. The rapid shift to contactless NFC cards was sparked in part by the COVID-19 pandemic, which prompted many consumers to seek to avoid contact with surfaces touched by others. However, the trend is likely to continue in the long term because NFC cards represent a faster, more secure option for consumers.

The vast majority of all cards issued to consumers in the United States already possess contactless NFC capabilities, which are denoted by an antenna icon printed on the card. Contactless cards appeal to issuers because they are less expensive to manufacture than a traditional chip-enabled card. If and when contactless becomes the primary acceptance method amongst cardholders, issuers can reduce card manufacturing costs and avoid the supply disruptions that occur with microchip shortages.

So, what needs to happen for contactless cards to achieve more widespread adoption? In short: consumer education and merchant enablement. Many consumers aren’t aware that they currently have NFC-enabled cards, don’t understand their benefits, and don’t know how to use them at the point-of-sale - which merely requires a quick tap on the payment terminal. In addition, many merchants who were early adopters of EMV technology may not have devices that are enabled to accept NFC cards. Once card issuers better educate consumers about the use and advantages of NFC cards, and more merchants enable their devices for contactless acceptance, the popularity of contactless cards will likely skyrocket.

Mobile phones are the new payment terminals: Contactless mobile payment options, such as Apple Pay and Google Pay, continue to gain traction with consumers, with in-store mobile payment usage in the U.S. growing 29% last year, according to eMarketer. In 2020, 92.3 million U.S. consumers aged 14 and above used proximity-based mobile payments at least one time. Additionally, more than half of all smartphone users are expected to use contactless mobile payments by 2025.

Deeper integration of providers’ payments systems with digital wallets: Digital wallets, represented by services such as Google Pay, Apple Pay, Venmo, and Cash App, are another form of payment that has become increasingly popular with consumers. However, these services do not come with the application programming interfaces (APIs) needed to seamlessly integrate data into providers’ payment information systems.

The lack of integration makes it difficult for providers to perform consolidated financial reporting and reconciliation on transactions using these services, which is one reason that few medical practices accept payments via digital wallets. However, as demand for these services continues to grow, digital wallet companies are likely to develop the APIs needed to fully integrate their data into providers’ information systems.

Providers will then need to consider more dynamic payment acceptance strategies, including customized patient payment collection experiences that consider patients’ personal preferences. One patient, for example, may prefer to pay via an automated draft from their checking account, while another may opt to pay using a card on file from their Apple Pay or Google Pay mobile wallet. Providers will also need to consider the entire patient journey and present appropriate payment options at all possible interaction points.

As consumers adopt digital options that add convenience and simplicity to the customer experience in other industries, patients are now demanding the same flexibilities from their healthcare providers. To keep pace with consumer needs and expectations, providers must prepare to embrace emerging payment trends that will soon become the norm in healthcare.