Reed Luhtanen, Executive Director, FPC
With 2023 in the rearview, here at the FPC, we are shifting our focus to 2024. Last year, many of our efforts, as well as larger industry initiatives like the launch of new faster payments offerings and services, laid the groundwork for 2024 plans and expectations, and we are excited and energized about the possible opportunities that await us during the year ahead.
Based on what we’ve already been able to accomplish as an organization and industry, I believe 2024 stands to offer much more for the greater industry in three key areas:
1. Increased innovation: In 2024, we will see a flood of faster payments innovations. With the launch of FedNow®, which provides another avenue on which to build faster payments products and services, new solutions will emerge to meet the growing and varying faster payments needs of today’s consumers and businesses. What I think we’ll begin to see is a stronger connection between these systems that enable new innovation, and newer technology like APIs, biometrics, blockchain, digital currency, digital identities, payments-as-a-service (PaaS), and more, that will allow for a faster, and more seamless and secure payment experience. Given 2023 data showed that 94 percent of banks globally had plans to invest in payments innovations, we can safely assume that many of those innovations will begin to come to fruition this year.
2. Expanded inclusion: Financial inclusion will boom. The 2023 Faster Payments Barometer showed that more than 80 percent of responding organizations plan to use FedNow, and 93 percent plan to send and receive FedNow transactions. This mass adoption provides a host of new opportunities for all consumers to access faster payments. Couple this with the new products and services that will be built and innovations that will be enabled, in 2024 consumers, including the unbanked and underbanked, will be able to take advantage of a range of solutions that can meet their needs. And these newer offerings will serve as more immediate, secure, and lower-cost payment options, providing an enhanced experience for this previously under-supported segment. The FPC’s Financial Inclusion Work Group will also share more insights in the new year into how faster payments can be leveraged to support the unbanked and underbanked, which we hope continues to fuel greater inclusion.
3. Enhanced choice that creates transaction growth: We’ll also see faster payments volume explode, precisely because the industry has introduced new faster payments solutions and brought a host of new faster payments users into the fold. Consider Same-Day ACH as an example. In its first full year, transaction volume grew 478 percent, and Same-Day ACH has seen at least 15 percent growth year over year since its inception. The same scenario plays out with RTP®: Its volume has increased by more than 10 percent each quarter since 2018. And it makes sense, as the Federal Reserve has indicated a large majority of consumers (75 percent) and businesses (83 percent) are actively using faster payments. And they want to use faster payments more in the future. So, applying this knowledge to FedNow, the new solutions to come, and the new consumers who will use them, we can guarantee faster payments volume in 2024 will proliferate.
Innovation. Inclusion. And Growth. This is what we, as an industry, can anticipate and rally around in the year ahead. At the FPC, we are eagerly looking forward to what’s to come. And we hope you are too.
*Note: Some of my additional thoughts can also be seen in, Predictive Hindsight And Faster Payments: The Trends For 2024, which recently ran on Forbes.com.