U.S. Bank's addition of "instant" person to person payments is a response to consumer expectations: If mobile payments are supposed to replace cash, they should be as fast as cash.

"We see this trend in the mobile space toward immediacy, and over the next few years you will see mobile transactions moving more toward real time," says Niti Badarinath, senior vice president and head of mobile banking and money movement at U.S. Bank.

U.S. Bank this week launched real-time P2P payments via Fiserv's Popmoney. U.S. Bank previously offered to handle Popmoney payments at standard speed, which takes two to three days to clear, and expedited for next-day delivery. The bank's fees are based on the timeframe and the size of the transfer.

The bank's move enables it to address scenarios presented by the near universal embrace of mobile and social networking, Badarinath says. "The mobile channel lends itself to instant payments. It's very immediate and it's very social," he says.

Each of the 2,000 financial institutions that offer Popmoney set their own pricing, Fiserv says. Payments made from Fiserv's Popmoney.com are always 95 cents, but the consumer-direct site does not offer instant payments.

U.S. Bank is also exploring the use of real-time capabilities in its marketing. The bank plans to deliver targeted offers in real time, such as offering a consumer the option to use reward points on a purchase that was just completed.

Such instant action is becoming important as shopping habits are being heavily influenced by Amazon.com and other digital stores, says Nick Holland, a senior payments analyst at Javelin Strategy & Research.

"The consumer is expecting you to deliver something the same day no matter what," he says. "If you can get a book or a plasma TV the same day, people are going to expect to be able to send money to someone in the same time frame, if it's 'just' an exchange of a few numbers on an app."

In another example, Regions Bank charges a fee for mobile check deposit, with the price based on how fast the user needs the funds. Those who want funds available in real time can pay up to 3% of the deposit value. The bank says this pricing model is based on Amazon.com's shipping fees.

"Customers are willing to wait for a while for super-saver shipping, or pay a little extra to have it the next day," Stephen Lamar, senior vice president for e-business product and channel management at Regions Bank, said in a recent interview.

The "real time" element is crucial to consumers but is missing in many banking services, says Aleia Van Dyke, an analyst at Javelin. Alerts, overdraft notifications, fraud monitoring, account opening, transfers and bill payments could all benefit from a boost in speed, she says.

"Banks that do not upgrade to real-time payments and transfers are in danger of losing valuable customers in today's 'always on' market," Van Dyke says, adding the competition could come from inside banking such as clearXchange and Popmoney, or outside banking from the likes of PayPal, Square, Google or Dwolla. "A move to real-time posting and eventually settlement is quickly becoming essential," Van Dyke says.

Consumers are accustomed to using mobile devices for instant access to what they need in a specific situation, says Jordan McKee, an analyst at Yankee Group.

"If [the car-ordering service] Uber didn't allow for location-based cab service and instead acted only as an advanced booking and reservation agent it wouldn't have reached the success it sees today," he says. "The value is entirely rooted in convenience and immediacy."

Most consumers value immediacy in payments, according to Celent, which says 78% of people strongly or somewhat agree that both parties should receive instant confirmation of payment. Sixty-nine percent strongly or somewhat agree that the recipient should be able to use the money immediately, Celent says.

"Customer expectations around payments and banking have been shaped by what's happening elsewhere in the digital world," says Zil Bareisis, a senior analyst at Celent. 

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