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Delayed instant origination methods are not standardized, resulting in
business customers limiting their dealings to one or two
payments deployment financial institutions. Establishing an instant payment-
originating relationship with business customers places
participating banks and credit unions in an advantageous
may prove costly position. Those that can facilitate instant payments will
remain a step ahead.

Banks and credit unions that postpone a decision on instant
payments risk losing business customers to participating
competitors that can satisfy client needs. What's at stake?
Late adopters could miss out on fee income opportunities
and retained customer/member relationships.
The window of opportunity is still open

The good news is that there's still time to act. You can
make the business case for adding instant payments
now, including revenue opportunities, the potential for
operational efficiencies and customer/member acquisition
and retention. Financial institutions can also make the
case for using instant payments to improve their products
and services. At a minimum, it would benefit banks and
credit unions to proceed with a comprehensive cost-benefit
By Dean Nolan analysis. This will better explain how instant payments
SRM adoption will improve speed and efficiency across your
financial institution.
he adoption of instant payments remains in its
early stages, with just 7 percent of U.S. finan- This assessment should determine if retail and commercial
cial institutions currently participating. Many customers/members already use any instant payment
T financial institutions are taking a wait-and-see platforms—or plan to do so. What types of use cases exist
approach, delaying the deployment of platforms such as among those users? Are they at risk of jumping ship if
the Federal Reserve's FedNow and The Clearing House's you fail to add the service to your payments offerings?
RTP Network. A recent survey by Dragonfly Financial Answering these questions should help you determine
Technologies found that just 24 percent of respondents are when, not if, you plan to adopt instant payments.
very likely to adopt FedNow this year.
New use cases emerge daily
Delaying the implementation of instant payments until 2025
might seem like a low-risk, cost-control initiative, but that Use cases and value propositions will drive the pace of
instant payments disruption. The service enables around-
decision could backfire on banks and credit unions. They
must choose to embrace instant payments or run the risk of the-clock access to consumers and businesses, allowing
for payments to occur and be immediately confirmed
putting themselves at a severe competitive disadvantage.
While a small percentage of financial institutions are wherever and whenever. Conducting regular assessments
of customer activity is essential. Some use cases take
plugged in, the RTP Network and FedNow cover over
two-thirds of all U.S. checking accounts. A growing belief less than 18 months to progress from the pilot stage to
becoming a must-have service. Some current use cases
that the pace of instant transactions will accelerate in 2024
further makes the case that these platforms will quickly include earned wage access, digital wallet unloads and
government payments (see www.greensheet.com/emagazine.
reshape the U.S. payments ecosystem (see https://tinyurl.
com/yxbf82bn). php?article_id=7425).
A warning for late adopters More and more value propositions are beginning to
surface, making it clear that instant payments will be a
Demand for instant payments is growing, with industry fixture of the payments ecosystem. The bottom line is that
experts predicting it will be among 2024's top trends. A financial institutions should fast-track implementation
Fed survey found that nearly 83 percent of businesses and include instant payments in their strategic planning
and three-fourths of consumers are already using faster for this year.
payments, with most saying they plan to keep using the
service in the future (see https://tinyurl.com/2p8y2m65). Dean Nolan is the Managing Director of Commercial Payments at
SRM, a trusted advisory firm serving financial institutions across North
These findings strongly indicate that instant payments for America and Europe. Dean is a seasoned expert specializing in building
businesses and consumers are here to stay, creating a need opportunities within the payments industry and has delivered billions
for financial institutions to stay ahead of the curve when in revenue growth and cost savings across a diverse range of organiza-
meeting consumer and business needs. Instant payment tions. To learn more about SRM, visit www.srmcorp.com.
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