This piece appears in Banker and Tradesman and discusses the results of a Federal Reserve survey around the topic of faster payments. The survey was conducted during the second half of 2020 among a variety of business sizes and vertical industries. A full summary of the survey is available through a link in the posted article. As readers will likely know, the Fed is in development phase for FedNow, a real-time payments system which is expected to launch in 2023. So in some sense, the survey is meant to reinforce the development of key services that meet use case demand. We have provided member research on the faster payments space consistently for several years.
‘Shonda Clay, the Federal Reserve’s chief of customer and industry engagement, said in a statement that the survey was designed to uncover insights to help the industry deliver instant payment services that meet the needs of end users….“Businesses’ appetite for faster payments has clearly accelerated due to growing acceptance of digital commerce during the pandemic,” Clay said. “Businesses are calling for consumer-to-business and business-to-business payments that facilitate quicker access to funds, the ability to post payments immediately and automatically, and timely notification of payments.”…The survey found that about 90 percent of businesses expect to be able to make and receive faster payments within three years, including payments that credit the payee’s deposit account within seconds. A majority of those surveyed said they had used some form of faster payments, and most expected to use faster payment options by 2023 or sooner.’
Although not covered in the article, if one reviews the full survey summary there is ominous news for banks that are not providing these services as 75% of medium and larger businesses will consider faster payments provisioning as a key decision factor for a bank relationship. So as we have reported adoption is gaining momentum across many use cases. Thise interested will want to review the full summary.
‘A majority of the businesses surveyed had sent and received faster payments in the past 12 months, including through digital wallets, same-day ACH and “push to card” services that use debit card networks….The pandemic continues to play a role in the accelerating the demand for faster payments. Managing cash flow and working capital in the current business climate were among the top concerns for nearly 75 percent of micro businesses and more than 60 percent of other businesses surveyed….“Coming out of the pandemic, many are focused on offering additional digital/online payment options, ensuring payment timeliness and growing sales and revenue,” the Federal Reserve said in the statement.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group