Building Resilience with Faster Payments

Reed Luhtanen, Executive Director, FPC

Each year in February, we celebrate America Saves Week, an effort aimed at encouraging consumers to commit to saving. This year’s event, which we recognized February 21-25, focused American consumers on “Building Financial Resilience.”

According to America Saves, “being financially resilient is more than having access to money; it includes being conscious of your own financial landscape, being aware of available resources, and being willing to seek out and take advantage of opportunities that will support and increase your financial wellness.” While all of these are important, having a clear understanding of your personal financial situation might be the most critical to long-term financial resilience. And faster payments can be a key component to ensuring American consumers have the most accurate picture of their financial environment at any given time.

How? Well, in order to understand how faster payments can help, it is important to first understand the why. In today’s banking environment, transactions can hit accounts at varying speeds. Some transactions may take minutes to post, while others could take longer. This can create confusion for consumers, as the assumed amount of funds in their account may not align with the actual available amount. This, in turn, can cause consumers to overdraft accounts, incurring fees. According to data, 33% of consumers paid at least one overdraft fee in 2020, amounting to $15 billion in overdraft fees.  

It's a significant problem for American consumers. And what’s even worse is it disproportionately affects those consumers who need the most help. According to one study, 95% of the overdraft fees consumers paid in 2020 were charged to people described as “financially vulnerable and financially coping,” or categorized as households “defined by their struggle to spend, save, borrow and plan.” These types of households averaged roughly 10 overdrafts in 2020, paying nearly $234 per household in overdraft fees.

It's these financial challenges that can severely impact consumers’ ability to save and build financial resilience, especially the financially vulnerable. But this is where faster payments can come into play. Faster payments can provide the means to address and solve for the struggles that arise when consumers don’t have the most accurate view of their finances.

And this is how. Transactions using faster payments can move instantly. Funds and details can be cleared and settled in real-time or near real-time allowing consumer account details and information to be updated just as fast. This can give American consumers a continually accurate and up-to-date view of their financial landscape. Consumers don’t have to guess or assume their account balance. They can have certainty and confidence in knowing what is there is a precise reflection of what is actually available. This assurance can significantly reduce the occurrence of overdraft fees, potentially freeing up funds that can be directed towards savings, which can support consumers, particularly the financially vulnerable, in building financial resilience.

Being cognizant of your financial landscape is a key component to long-term financial resilience. And faster payments is a surefire way to ensure consumers have the most accurate view of that landscape. It’s why the FPC is committed to making faster payments a reality, as these payments, along with other measures to support the financially vulnerable, can go a long way in maintaining the financial health of Americans and building financial resilience.

To join our efforts to advance faster payments, visit


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