Blogs

1)    What’s driving demand for instant payments? Faster payment options, including instant payments, have quickly grown in popularity across the United States. According to Federal Reserve research, seven in ten businesses and consumers want and expect their primary financial institutions to offer faster payments and see instant payments as a solution to their evolving needs and a necessity in an always-on, online world. Read more about this appetite for faster and instant payments in the research studies on FedNowExplorer.org.

2)    How faster and instant payments work. When it comes to instant payments, the end-user process may seem simple: One user sends a payment and, moments later, the other user is notified that they’ve just received the payment. That’s simple enough, but the behind-the-scenes process can vary and feature different risks and benefits. To better understand the faster payments process, take a look at this hypothetical payment of $300 from Janice to her handyman, Frank.

3)    The differences between fast, faster and instant payments. Many people use the terms “fast,” “faster,” “real-time” and “instant payments” interchangeably. And to consumers, faster and instant payment systems may seem similar. But things aren’t as similar behind the scenes. Faster payment systems can differ in several ways, including how clearing and settlement occur between financial institutions. These differences may affect how your financial institution designs the services you offer.

4)    Fraud and instant payments. There’s a lot to love about instant payments, but as with any type of payment, the potential for fraud exists. In general, the actions financial institutions, consumers and businesses take to minimize fraud with other payment types are also applicable to instant payments. However, due to their speed and irrevocability, instant payments require some unique considerations. Financial institutions thinking about instant payments adoption should consider taking a holistic approach to fraud mitigation, particularly in cases where existing fraud solutions and processes may be based on batch processing or manual intervention. Visit the Fraud Control Tower on FedNowExplorer.org to learn more.

Continue on your instant payments journey.

As demand for instant payments grows, more and more financial institutions, service providers and other organizations in the payments ecosystem are embracing the vast potential of this modern system. Maturation of the network and the proliferation of new use cases will increasingly present innovative opportunities for institutions to offer new solutions, solve existing end-user pain points and improve customer satisfaction. For more information on instant payments, visit FedNowExplorer.org.