Banking on real-time payments

A banking behavior study recently commissioned by banking and payment technology firm FIS revealed consumer demand for real-time payments is on the rise. "Real-time payments are clearly the future of money movement," stated Anthony Jabbour, Executive Vice President of North American Financial Institutions at FIS.

The final installment in the FIS three-part study series examined consumer sentiments toward and potential economic value for financial institutions (FIs) that instantly authorize person-to-person (P2P), account-to-account (A2A), online billing and outbound foreign money transfer payments.

Consumers want convenience

The study identified three primary consumer segments for early adoption of real-time payments: the affluent, outbound foreign money transfer users and younger consumers. Across all segments, early adopters universally agreed that convenience, flexibility and pay-anywhere availability were key factors when considering real-time payment options.

According to FIS, the outbound foreign money transfer market represents a $1.1 billion revenue opportunity for U.S. banks. Within this segment, 80 percent of survey respondents said immediate access to funds was most important, compared with 58 percent of A2A and 41 percent of P2P users. Of the 1,538 surveyed, 52 percent of overseas money transfer users, 45 percent of P2P and 36 percent of A2A users said they would prefer to use their mobile devices to make real-time payments.

However, for usage of mobile real-time payments to become widespread, the ability to enter a recipient's email address or phone number to route a transaction rather than bank and checking account numbers factors in; this is particularly true among younger consumers. "Fifty-five percent of gen Y and 43 percent of gen X consumers stated they would be more likely to use real-time payments if they could transfer funds in this way," FIS stated.

FIs take note

Fifty-five percent of respondents indicated they would prefer to obtain real-time payment applications and services from the FI holding their primary checking accounts. Indeed, not only were FIs the first choice for real-time payment services, but many consumers surveyed were willing to pay for these services.

"As the research has shown, people trust their financial institutions to bring them real-time payment solutions, but they will use other avenues if their bank can't meet their needs," said Jabbour. "For that reason, financial institutions must adapt to keep step with their customers and not fall behind nonbank competitors."

Editorial Note:

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

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