PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

The World Wants Real-Time Payments, And They Want Them NOW

PaymentsJournal by PaymentsJournal
January 20, 2022
in Featured Content, Real Time Payments, The PaymentsJournal Podcast
0
The World Wants Real-Time Payments, And They Want Them NOW

The World Wants Real-Time Payments, And They Want Them NOW

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
https://media.blubrry.com/paymentsjournal/paymentsjournal.com/wp-content/uploads/2022/01/Fiserv-004-003_mixdown.mp3

Podcast: Play in new window | Download

Real-time payments have been the subject of extensive research over the past several years. New real-time payment options have emerged as consumer expectations and demand are driving real-time payment growth across multiple channels.

To learn more about the paradigm shift towards real-time payments and unpack how the NOW® Gateway from Fiserv can provide connections to a range of real-time payment capabilities, PaymentsJournal sat down with Tim Ruhe, Vice President of Real-Time Payments at Fiserv, and Sarah Grotta, Director of Debit and Alternative Products Advisory Service at Mercator Advisory Group.

PaymentsJournal
The World Wants Real-Time Payments, And They Want Them NOW
PaymentsJournal The World Wants Real-Time Payments, And They Want Them NOW
PaymentsJournal

Top priorities for financial institutions

Financial institutions have been investing time, energy, and money into real-time payments for one all-encompassing reason: to meet customer expectations. Fiserv recently commissioned Javelin Strategy & Research to look at today’s real-time payments landscape.  The research shows 75% of polled consumers feel it is important to receive payments and have access to funds instantly. This expectation is particularly strong among the youngest generations, with 90% of Gen Z respondents and 93% of Gen Y (Millennial) respondents highlighting real-time activity as essential.

There are plenty of reasons why consumers want faster payments, according to Ruhe. “It’s a social obligation, or it’s an urgent payment, or they don’t want to be late,” he said. “There are many, many ways that consumers want to be able to take advantage of this.” Moreover, according to Grotta, Mercator research forecasts that the rate of real-time payments growth is only going to speed up.

Beyond that, real-time payments have the potential to impact every type of payment interaction that financial institutions support today. “It’s going to touch how we transfer money between accounts, how we get paid, how we pay bills, how businesses pay each other, and might even affect how you buy goods and services from a merchant,” Ruhe explained. “Financial institutions are starting to think about that journey.”

What is driving real-time transformation

As previously mentioned, customer expectations play a significant role in determining where FIs choose to make investments in their business offerings. Currently, consumers don’t want to put their lives on hold when payments aren’t processed over the weekend – they expect 24/7 service. For FIs, this is an opportunity to stand out from the pack. “You want to be able to differentiate yourself now, because over time, this will become table stakes,” said Ruhe, meaning real-time will soon be viewed as a baseline offering. “Then you will need to be at competitive parity.”

Additionally, real-time payments lead to deeper digital engagement. For example, early data has demonstrated that users of the Zelle® person-to-person payment service are more heavily engaged with their financial institution and exhibit greater loyalty than non-users. “Customers who use Zelle have higher balances, they have more product holdings, they are more profitable, and they don’t leave the financial institution as frequently,” Ruhe explained. And that is just in the P2P payments space. “What’s going to be that next application that really drives the adoption and use of faster and real-time payments?” Grotta wondered.

The network perspective and what comes next

Both the RTP® Network from The Clearing House and the Zelle Network® are being adopted at a rapid clip. $34B was processed through RTP in Q3, which represents an 18% growth from Q2. Meanwhile, the Zelle Network processed 828M transactions totaling $226B over the first six months of 2021. “We’re seeing a lot of uses of Zelle, and RTP works on all bank accounts for any financial institution that support RTP, so that opens up a whole other set of capabilities and use cases,” Ruhe noted. “And we are starting to see them interoperate, so that’s creating a lot of innovation as well.”

One of the next big steps in the real-time payments industry will be the addition of the Federal Reserve’s FedNow network, which should launch late next year. However, there is still an open question of whether or not FedNow and RTP will have interoperability issues. “It’s not a new thing for us to have more than one payment network,” Ruhe clarified. “There’s a couple different ACH networks and multiple card networks. This is kind of how we roll here in the U.S.” The intention behind this diversity is not to cause complications, but rather to drive ubiquity. Competition spurs continuous innovation, and with cross-border payments enablement as one of the next big hurdles to cross, who knows if that will be on an existing or future network?

Bringing everything together with the NOW Gateway

The NOW Network from Fiserv, which was introduced in 2014, enables financial institutions to deploy multiple payments use cases across multiple networks with one single connection. NOW is an acronym for “Network for Our World,” and Fiserv recently introduced the NOW Gateway: RTP Network, which can receive credit transfers from RTP. “NOW Gateway simplifies the task of implementing real-time payments,” explained Ruhe.

Support of RTP is applicable to plenty of use cases, including paying gig economy and temp workers, plus any emergency payroll situations. If one of the nearly 1,300 financial institutions that have implemented Zelle decides they want to support RTP, Fiserv can add that capability simply through the NOW Gateway. Furthermore, Fiserv can bring real-time capability to electronic transactions that currently take two or three days. “In summary, NOW future proofs the implementation of real-time payments at financial institutions,” Ruhe concluded. 

Tags: FedNowFiservP2PReal Time PaymentsThe Clearing House
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Mercator Advisory Group analysts and industry professionals.

    Must Reads

    scams

    As Scams Become Omnipresent, New Tools Can Help FIs Fight Back

    March 30, 2023
    item clearing

    As Check Volumes Decrease, Financial Institutions Need to Consider Alternative Clearing Options

    March 29, 2023
    payments friction

    Too Much Payments Friction Can Lead to Customer Chafing

    March 28, 2023
    online fraud

    Understanding the Cost of Online Fraud and How to Prevent It

    March 27, 2023
    live shopping, ebay

    Q&A: eBay Exec on Live Shopping and the Future of Payments

    March 24, 2023
    AI and Biometrics in Regulatory Compliance in Finance

    The Importance of AI and Biometrics in Regulatory Compliance in Finance

    March 23, 2023
    Everyone Benefits from the Real-Time Payment Networks  

    Everyone Benefits from the Real-Time Payment Networks  

    March 22, 2023
    commercial payments

    Optimizing Commercial Payments in the Digital Age

    March 21, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result