Blackhawk Network (BHN), a global leader in branded payments, has released new research showing that while consumers expect fast access to business payouts, their level of banking access significantly influences how they prefer to receive and use those funds.

Business payouts are funds that organizations distribute directly to individuals. They include insurance and warranty claims, rebates, refunds, legal settlements, returned security deposits, incentives and other business disbursements. For the insurers, retailers and other organizations that issue them, each payout is also a direct touchpoint with the recipient, and the delivery method shapes how quickly and easily the funds can be used.

Across all respondents, speed and immediate access emerged as shared priorities. Fifty-three percent of those surveyed said receiving their money quickly was important, while 45% valued being able to use funds right away. Beyond these common expectations, the research found meaningful differences in payment preferences, experiences with paper checks and the importance of digital wallet functionality.

“Organizations often focus on how quickly they can deliver payouts,” said Stacie Monjauze, Sr. Director, Business Development at BHN. “Our research shows that’s only part of the equation. Recipients have different needs based on how they access and manage their money, making flexibility and recipient choice important considerations when designing payout programs.”

Consumer payouts are used across a wide range of industries. As organizations continue to grow these programs, the research suggests that understanding how recipients access and use funds can help create payout experiences that are faster, more flexible and better aligned with consumer needs.

Banking access shapes preferred payout method

The scale of this audience is tracked at a national level: the FDIC’s 2023 National Survey of Unbanked and Underbanked Households found that 4.2% of U.S. households were unbanked, and the survey has historically measured additional households as underbanked. Against that backdrop, consumer preferences also differed in the types of payouts respondents wanted to receive. Across the consumer groups surveyed, cash-equivalent payouts and gift cards emerged as preferred payout options. Unbanked and underbanked consumers — those with no access or limited access to traditional banking — expressed stronger preferences across payout methods overall. These preferences reinforce the value of offering recipients greater flexibility and choice.

Digital access is part of the payout experience

The research also found that how recipients access and use funds after delivery matters. Digital wallets such as Apple Pay, Google Pay and PayPal have become widely used payment tools, and many retailers’ digital gift cards can now be stored directly in smartphone wallets. Forty-six percent of unbanked and underbanked respondents said the ability to add digital gift card funds to a digital wallet was very important, compared with 29% of fully banked consumers.

For many recipients, the payout experience does not end when funds are delivered. The ability to store and use funds digitally can be an important part of whether a payout is convenient and immediately usable.

Paper checks create greater friction for unbanked and underbanked consumers

Paper checks remain a common disbursement method for many organizations, but recipients without a bank account generally have no direct deposit option for them; accessing check funds typically requires third-party check-cashing services, which commonly charge fees. Paper checks were one of the clearest examples in the research of how banking access influences the payout experience. Nearly two-thirds (63%) of unbanked and underbanked consumers surveyed said they feel frustrated when receiving a paper check as a payout, compared with 46% of fully banked consumers.

The full report includes additional findings on payout preferences across different payment amounts, willingness to pay for faster access to funds, merchant credit, prepaid cards and gift cards, digital wallet functionality and other consumer payout behaviors.

Source: GlobalFinTechSeries