Collaboration with Glenbrook Partners Uncovers Key Industry Views on Faster Payments Advancements; Need for Ubiquity, Interoperability, Strong Dispute Resolution
Nov. 4, 2019 – The U.S. Faster Payments Council (FPC), in partnership with Glenbrook, today released results from the Faster Payments Barometer. As part of its ongoing mission to understand, influence, and drive the industry toward a ubiquitous faster payments system, the FPC conducted the survey of payments system stakeholders to gauge their views on a variety of topics related to faster payments in the United States.
The inaugural Faster Payments Barometer was widely circulated and received well over 700 responses from a broad array of payments stakeholder segments including financial institutions, core processors, payment network operators, business end users, acquirers, fintechs, and more. The survey was conducted from Sept. 18 – Oct. 6, 2019.
Journey to Faster Payments in the U.S.
Overall, survey participants view the United States as falling behind the rest of the world when it comes to faster payments adoption. Fifty-nine percent of survey respondents indicated that the U.S. is not making “satisfactory progress toward faster payments adoption.” Reasons cited for the U.S. being behind included “existing faster payments systems have not yet reached ubiquity and do not interoperate with one another” (53 percent), “high upfront costs and complexity to implement (resources, operational changes, staffing, etc.)” (48 percent), and “lack of common rules and standards” (35 percent).
“The results from the Faster Payments Barometer suggest there is an appetite to adopt faster payments if the industry comes together to provide a seamless, uniform, and interoperable approach,” said Kim Ford, FPC Executive Director. “We believe that the FPC is well suited to respond to this desire and lead the way toward meaningful progress, as we are bringing together a diverse group of stakeholders committed to working in a collaborative, inclusive manner to resolve pain points and move the industry forward.”
Industry Support for Interoperability
Survey respondents were asked how important it is to achieve interoperability across compatible faster payments systems in the U.S. market with a large majority (95 percent) stating either “very important” (78 percent) or “somewhat important” (17 percent). Participants were also questioned on what the timeline
for interoperability among faster payments systems should be—half of respondents (49 percent) thought interoperability should be attained in 1-4 years and 22 percent selected “as soon as FedNowSM is implemented.”
The Faster Payments Barometer further shows that participants in the payments industry generally agree on some other key aspects. When asked which attributes should define faster payments, 29 percent selected “directory/addressing service” with 68 percent of those respondents rating it as “very important” to their organization. Additionally, a strong majority, 73 percent, felt that dispute resolution should be an inherent feature of a faster payments system.
Solving “Everyday” Pain Points
Results from the survey illustrate that faster payments are considered a way to improve payment systems’ usability. Participants were asked to select from 16 options which use case their organization was currently most interested in for faster payments. “Bill payment” (59 percent), “person-to-person” (53 percent), and eCommerce (47 percent) rounded out the top three choices with “invoicing/supplier payments” and “transfers between accounts at different financial institutions” tied for fourth (44 percent).
In a final question, respondents were asked at what point do they think we are currently at in terms of implementing faster payments in the U.S. Almost 60 percent believe we are not making enough progress with half (50 percent) stating we are “gaining momentum” and 39 percent acknowledging we are “at the very beginning” of our journey.
“We are extremely pleased with the strong response from across the industry in that results clearly identified areas of alignment and areas needing enhanced focus,” said Beth Horowitz Steel, partner at Glenbrook Partners. “Over the next few years, the Faster Payments Barometer will continue to drive insights into faster payments here in the U.S. and enrich the industry dialogue by introducing new topics, such as cross-border and emerging use cases.”
For more information on the FPC, its current work efforts or to join, visit FasterPaymentsCouncil.org.
U.S. Faster Payments Council
About the U.S. Faster Payments Council (FPC)
The FPC is an industry-led membership organization whose mission is to facilitate a world class payment system where Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. By design, the FPC encourages a diverse range of perspectives and is open to all stakeholders in the U.S. payment system. Guided by principles of fairness, inclusiveness, flexibility and transparency, the FPC will use collaborative, problem-solving approaches to resolve the issues that are inhibiting broad faster payments adoption in this country. For more information, please visit FasterPaymentsCouncil.org.
About Glenbrook Partners
Glenbrook is a payments consulting, education, and research firm that brings to our financial services and financial technology clients the unique combination of specialized skills in payments, many years of hands-on experience in the field, and a wide network of professional relationships. The firm helps clients with strategy definition, product development, and the application of technology to solve leading edge problems in the financial services industry. For more information, visit Glenbrook.com.