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Instant payments gratification continues to take hold among businesses and consumers. New evidence of that from a couple of Federal Reserve surveys shows that 83% of businesses and 75% of consumers already use some form of faster payments.
Favorable sentiment toward instant payments could increase as 66% of businesses and 61% of consumers say they are likely to use faster payments more often in coming years.
The Fed’s survey data comes as the nation’s banking regulator prepares for the commercial launch of its FedNow real-time payments service, set to debut in July.
Particular use cases stand out for faster payments, which can include real-time payments services and same-day ACH. Seventy-one percent said they wanted to use it to make payments to businesses. Person-to-person payments was cited by 65%, followed by account-to-account payments, 61%, and business to person, 27%. The survey sampled responses from 2,002 U.S. adults.
When they use a faster-payment service, fraud protection is top of mind, with 90% citing it as most important. That was followed by payee confirmation, 83%, and notification, 73%. Other elements included service availability, 70%, service provider, 69%, funds movement, 62%, and international, 45%.
On the business side of faster payments, 57% of companies said they use a real-time payments service to make payroll payments. Like consumers, businesses said bill payments were a top use case.
Forty-five percent of businesses also anticipate faster payments services will help lower their costs, and 74% said receiving automated payment-related information is somewhat or very important. FedNow will use the ISO 20022 messaging standard, which will automate much of the data-messaging in a transaction.
The survey also bolsters the role of financial institutions in providing faster-payments services. Seventy-five percent said it was important their financial institution offer faster payments. FedNow is a financial institution-based service.
Other factors that motivate businesses to use a faster-payments service are flexibility, cited by 38%, 24/7 service, 33%, instant availability, 32%, and discounts for early payment, 30%. The business survey included responses from 2,003 companies.
“Access to faster-payment options, including instant payments, is now seen as indispensable rather than a nice-to-have,” Connie Theien, head of industry relations for Federal Reserve Financial Services, said in a statement.
