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Consumers want real-time payments - from their primary FI

January 8, 2014 by Terry Dooley — SVP & CIO, ITS, Inc

A recent FIS study reiterates three key points regarding consumers and real-time payments. 

First, a significant portion of the population is showing an interest in using real-time payments. Second, consumers expect those payments to be mobile, immediate, and convenient. Third, the majority of those interested in real-time payments are looking to their financial institutions to provide the service.

"Real-time payments are clearly the future of money movement, according to the consumer demands laid out by our data," said Anthony Jabbour, EVP for North American financial institutions at FIS.

According to the report, wealthy individuals, young people, and those who send money overseas are the three population sectors most likely to be adopters of real-time payments. Convenience features such as access to real-time apps and services via mobile device were considered imperative to many consumers.

Fifty-two percent of consumers who use outbound foreign money transfer, and 45 percent of person-to-person users indicated an interest in making real-time payments via mobile device.

Being able to enter a recipient's email address or phone number instead of bank and checking account numbers to route a transaction was another convenience that ranked highly. Younger consumers are especially interested in this feature, with 55 percent of Gen Y and 43 percent of Gen X consumers indicating they would be more likely to adopt real-time payments if it were an option to transfer funds in this manner.

The study measured consumer opinions and prospective monetary impact for FIs that offer real-time payments, in the following categories of users:

• outbound foreign money transfer;
• account-to-account;
• person-to-person; and
• online bill payer.

The study found 80 percent of consumers who use outbound foreign money transfers cited quicker payment as a key consideration. Survey participants said the main reason for its appeal was the peace of mind that immediate payment provides both sender and receiver.

More than half of A-2-A users rated faster transfers between accounts as being paramount, while 41 percent of P-2-P participants said a recipient's immediate access to funds was most valuable. Sending money to family and friends for gifts, payments and emergencies were the use scenarios most often mentioned by potential real-time payments users.

As for where consumers would expect to access the service, 55 percent indicated that the FI in which they have their primary checking account would be their preferred real-time payments option provider.

"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.

This data is a good reminder of the growing importance for FIs to get into the real-time payments game. The continued increase in consumer interest in this technology — and the fact that more than half of those polled named their FI as their preferred provider — are strong indicators of the potential value FIs stand to realize from real-time payments offerings.

Read more about trends and statistics.

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