Banks have an opportunity to seize share against alternative payment providers in real-time payments, according to new FIS-funded research from Ipsos Vantis.
Real-time payments resonate with consumers, and both senders and receivers consider immediate availability of funds to be very important, the research says. For overseas money transfers, 80% of users say it's important for recipients to be able to use the money sent to them immediately. For other payment types, 58% of account-to-account users and 41% of person-to-person users want to have immediate access to funds.
Banks can benefit from their incumbency, particularly in foreign transfers, where there is a $1.1 billion revenue opportunity for U.S. banks surrounding outbound foreign money transfers, the researchers said, noting that a majority of consumer view their financial institution as the first choice for real-time payment services.
Mobile and online are also important. Consumers said they would use real-time payments for a significant portion of their transactions, if the function was available through online or mobile banking. Online payers who currently use expedited payments estimate they would use real-time bill payment via their online or mobile banking app for 71% of their expedited bill payments, the research says. For person-to-person payments, nearly as many Gen Y respondents, or consumers aged 18 to 33, prefer to use mobile phones to make real-time payments as those who prefer computers and laptops. Also, four out of 10 survey respondents who use outbound foreign money transfer and person-to-person services say they want to be able to access real-time applications through their mobile phones.
Financial institutions and other payment companies are expanding their ability to process payments faster. PNC is working with Fiserv to deploy the tech company's Popmoney Instant Payments product, and Harland has also developed technology to speed processing.