Reed Luhtanen, Executive Director, FPC
At the FPC, we are committed to advancing the adoption and growth of faster payments. But we are also unswerving in our efforts to ensure faster payments are accessible and beneficial to all.
In June, the FPC’s Financial Inclusion Work Group released the Faster Payments and Financial Inclusion survey report, which sought to provide insight on the efforts needed to make sure faster payments solutions are inclusive for all Americans. While the report showed we are making progress with faster payments adoption—more than 90% of financial institutions offer faster payments or have plans to—addressing pain points faced by the unbanked and underserved continues to present challenges.
Take trust, for instance, a known pain point for the underserved/unbanked. Our survey revealed that while 42% of institutions allow faster payments users to request a return of funds due to authorized fraud, 19% do not. Knowing measures, like biometric authentication, which 23% of financial institutions use, are in place to help consumers in the fight against fraud will be key to supporting financial inclusion, building trust, and ultimately, driving adoption. Additionally, other measures that many financial institutions are already implementing are contributing to improved trust. The survey report showed that 72% of financial institutions inform the sender once faster payments funds have been received; 55% of institutions use two-factor authentication to support safety and security; and more than 50% believe they provide clear and simple messaging about faster payments services and fees. These, and other measures, can go a long way in supporting and enhancing trust.
Historically, a lack of transparency with regard to fees also served as a challenge for the underserved and unbanked. Our survey showed that while 55% of institutions do not charge fees to use faster payments services, 46% do. By ensuring that consumers have options based on the immediacy of payment, providers create clarity and put the choice in the customer’s/member’s hands. This brings with it certainty to the transaction and the opportunity for the underserved and unbanked to select the level of expediency, and corresponding costs, they need.
This rings true for cross-border payments as well. Cross-border transactions that do not leverage faster solutions can result in delayed payments to recipients and can be difficult to track. According to our latest report, only 8 of 31 financial institutions currently offer cross-border faster payments solutions. However, they offer much potential: With the advent of faster cross-border payments, the underserved and unbanked will gain additional line of sight into transaction speed and status, helping to improve upon the long-standing pain points around transparency as well as speed. And with faster payments adoption, growth, and continuing global innovations, U.S. cross-border faster payments could be a path to more fully supporting financial inclusion.
These points just scratch the surface of what the Work Group uncovered; I invite you to read the report to find out more. The Faster Payments and Financial Inclusion survey showed us there is much opportunity to ensure faster payments growth and accessibility. Faster payments are designed to be safe, affordable, and trustworthy, and together, we can make great strides in ensuring they continue to progress and are inclusive for all.
If you’d like to join us in our journey, please consider becoming a Member of the U.S. Faster Payments Council. Learn more about membership here: https://fasterpaymentscouncil.org/Why-Join-the-FPC.