Technology advances in financial services continue to soar to new heights. They are a social utility and are creating new frontiers that impact sending, receiving and managing monetary transactions of all types. The user experience in payment transactions has greatly improved in functionality, design, and number of services. One of the things driving these advances is the preference of today’s consumers, in particular millennials, for digital. Most millennials have experienced peer-to-peer, mobile, and remote digital transactions. The process is instant and provides a great deal of value to customers seeking speed, convenience, security, and a seamless experience. So, it is no surprise consumers are quickly moving away from the traditional ways of doing things, including how they file their taxes and get their refund. An example of this is the rise in the use of paycards (also known as payroll cards) to receive tax refunds along with other emerging technologies that are pushing to make the entire tax experience digital.
With tax season around the corner, how do these factors impact receiving tax refunds?
Accountants and tax preparation companies have adopted technology advances and improved customer experience in not only filing tax returns but also receiving refunds. Although the traditional process of how taxpayers file returns and receive refunds are still available, tax preparation services have been quickly transformed, again in large part because of consumers’ digital preference. Large tax preparation companies have experienced drastic decreases in in-person tax return services, and massive increases in digital W2 document uploads, requiring them to change their business model. This digitized tax return process accepts employee W2 forms, and other IRS required materials to be submitted and uploaded to digital portals quickly and easily, even from a mobile device. As it relates to receiving their tax refunds, consumers now can opt for a safer and faster way than getting a paper check in the mail. Consumers with paycards can have their refund direct deposited to their card which shortens the refund time from weeks to days. With many consumers relying on their refund check to “catch up” on bills getting their money faster is critical to their financial well-being.