A growing proportion of US businesses expect faster payments in the coming years – and will choose their bank accordingly, according to research from the Federal Reserve.
Approximately three quarters of the 2,010 business representatives surveyed said it was “important to offer faster payments”, the Fed reported.
In addition, approximately 90% of companies reported that they expected to be able to “initiate and receive” faster payments within three years – including instant payments.
Crucially, almost two thirds of respondents said the ability to make and receive instant payments would play a key role in any future decision about choosing a banking partner.
“Businesses’ appetite for faster payments has clearly accelerated due to growing acceptance of digital commerce during the pandemic,” said Shonda Clay, the Federal Reserve’s chief of customer and industry engagement.
“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 primary method of facilitating faster payments currently in use is through digital wallets. Companies are also using same-day automated clearing house payments and “push-to-card”, which credits the payee’s account within minutes of a transaction.
The Federal Reserve’s own FedNow service is developing an instant payments service to help banks facilitate faster transactions.
“The FedNow Service is developing capabilities to address business needs for safe, instant, data-rich payments and collaborating with financial institutions and business solution providers to implement them when the service launches in 2023,” said Nick Stanescu, FedNow Service business executive.
A recent study from global consultancy group McKinsey found that the pandemic hugely accelerated digital developments, with an estimated five years’ worth of digital technology adoption having taken place in less than a year as companies adapted to enforced home-working conditions.
At the end of May, experts from Celent and Alacriti discussed the journey to real-time payments in a Banking Exchange webinar. The session is still available to view on demand here.
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