Reed Luhtanen, Executive Director, FPC
In April, the Faster Payments Council released the 2023 Faster Payments Barometer, the fourth installment of its survey gauging progress and perceptions around faster payments in the United States, and the trends, use cases, and challenges impacting adoption and use. And we’ve found that faster payments adoption is flourishing.
When looking at real-time payments, the Barometer revealed that 62 percent of survey respondents have implemented/are implementing RTP® and 44 percent are implementing FedNow℠. And in the next one-to-two years, 27 percent plan to implement RTP, and 44 percent plan to implement FedNow. So, by 2025, nearly 90 percent of organizations who responded to our survey should have introduced at least one of the two real-time payments rails in the United States.
Now that’s impressive, because for so long, many faster payments stragglers claimed there were no real use cases or demand for real-time payments. But the Barometer and other industry data show us that today, use cases and demand are driving adoption.
Take, for instance, real-time P2P payments. According to the 2023 Barometer, when it comes to instant or immediate payments solutions, Zelle® currently tops the list, over FedNow, RTP, Push-to-Card, etc. with almost 80 percent of organizations having already implemented the solution. Furthermore, P2P use is exploding. Case in point: Zelle recently reported that in Q1 2023, it processed nearly 5,000 transactions per minute, an increase of almost 30 percent year over year.
But that’s just one example. Consider instant disbursements. The 2023 Barometer indicates disbursements is the second leading faster payments use case for responding organizations, with 46 percent enabling this function. What’s more, according to industry research, instant claims payouts topped $277 billion last year, 20 percent of the total dollar distributed in 2022, which is up from 9 percent in 2020. Or look to bill pay, with 45 percent of responding organizations using/enabling the function. In addition, more than 70 percent of consumers report readiness for real-time bill payments.
The 2023 Barometer also identified other use cases responding organizations are now enabling, such as payroll (36 percent) and merchant settlement (23 percent), among others, which, too, are encouraging greater adoption and use. In looking at RTP volumes, earned wage access and real-time payroll have become the fastest growing use cases on the network, because “workers can receive their pay on the same day that they work, providing immediate cash liquidity to workers who need to pay bills, provide food for the family, or to pay an emergency expense.” It fulfills a need that many consumers are looking for. And from the business side, RTP is even seeing more merchant funding over the network, allowing businesses to “instantly receive merchant payments from that day’s transaction.”
The data makes it clear: Faster payments implementation and adoption is climbing. And our research demonstrates that growth feeds the emerging needs of consumers and businesses alike. So faster payments have become table stakes, not only necessary to meet customer/member demand, but required as a means to evolve, improve, and compete.
Interested in exploring the full-scale of faster payments use cases? Be sure to visit the Faster Payments Council’s Use Case Repository.