Instant payments are on the verge of becoming a profit center, according to a recent survey. Participants were asked how likely it is that B2B real-time payments will become a profit center for their bank within three years, and 37% indicated it was likely, while 14% expressed an even higher level of confidence. Only 8% said it’s unlikely to happen.
The report from Finzly also looked at the path to achieving this profitability. The strongest avenue appears to be expanding the use of FedNow.
After launching in July, FedNow finished 2023 with more than 300 participating financial institutions. But the majority of those institutions are still using it for “receive only” services.
While half of Finzly survey respondents identified “fees” for enabling their customers to send and receive instant payments as a profit opportunity, only a handful recognized the potential of Request for Pay (RfP) as a value-added service. Additionally, when attendees were asked about the biggest profit opportunity with B2B real-time payments, only 15% cited “offering RfP.”
“Identifying and executing appropriate instant payment use cases is critical to meeting customers’ needs and generating revenue,” said Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research. “Being able to send and receive instant payments is also essential, especially to support RfP and other FedNow functions. While receive-only is a good start, financial institutions ultimately need to be able to send and receive funds in order to fully take advantage of real-time payment capabilities that support innovative products.”
Rapid Payments, Rapid Adoption
Many companies are willing to pay for speedier payments, with 50% of businesses indicating as much per the Finzly survey. Respondents said that $2.50 seemed like a fair price for sending $1,000, while $100 was a reasonable fee for receiving $100,000 more quickly.
Another survey from the U.S. Faster Payments Council found that 88% of financial institutions said that they will implement FedNow and/or RTP within the next two years. RTP has been implemented more, with 61% of FIs saying that process is underway or complete. FedNow has been or soon will be implemented by 44% of respondents. Only 12% of FIs said they plan to wait more than three years to implement these payment services—or won’t implement them at all.