Study Reveals Strong Demand for Real-Time Payments

Most consumers want payment services from their primary financial institutions.

April 23, 2013

Offering real-time payments can increase convenience and help consumers better manage their financial lives, according to a study released by FIS.

The report also reveals that consumers look to their primary financial institutions as the first choice for real-time payment services.

The study gauged consumer sentiments about the ability to instantly authorize and settle transactions in four key market groups: outbound foreign money transfer users, account-to-account (A2A) transfer users, person-to-person (P2P) payment users, and online bill payers.

The study sought to better understand the challenges consumers face with payments and how real-time payments can solve them. It also examined how real-time payments influence how consumers choose payment methods.

PaymentsOverall, the study underscored that real-time payments resonate with consumers and that the immediate availability of funds is very important, both from a sender and a receiver perspective.

To that end, 80% of overseas money transfer users believe it’s important for their recipients to be able to use the money they send to them immediately. Also, 58% of A2A users and 41% of P2P recipients want to have immediate access to their funds.

“It’s peace of mind. It’s less stressful to know the funds are there right away,” according to a survey respondent.

Other key findings:

Trust in financial institutions. Fifty-five percent of those surveyed prefer to get real-time payment services from their primary financial institution rather than a credit card or alternative payment provider.

Most consumers agreed that real-time payments would make banking more convenient and help them manage their money better.

Strong adoption potential. Consumers reported they would use real-time payments—if available through online banking or a mobile banking app—for a significant percentage of their transactions.

Online bill payers who currently use expedited payments estimate, on average, they would use real-time bill payment through their online banking or mobile banking app to make real-time payments for 71% of their expedited bill payments going forward.

On average, users of overseas money transfers say they would use real time for 47% of those transactions, while A2A users project making 36% of their money transfers in real time and P2P users expect to use real time for 25% of their P2P transactions.

Reaching the mobile consumer. Four out of 10 survey respondents who use outbound foreign money transfer and P2P services want to be able to access real-time applications through their mobile phones.

For P2P payments, nearly as many Gen Y respondents (those age 18 to 33) prefer to use mobile phones to make real-time payments as those who prefer computers and laptops.

Payments“The findings of our survey underscore the fact that real-time money movement is clearly resonating with the majority of consumers, and particularly with key consumer segments like Generations X and Y,” says Anthony Jabbour, executive vice president, North American Financial Institutions, for FIS. “The research confirms that mobile technologies will be a catalyst for real-time payment adoption.”

For example, among consumers who conduct person-to-person transactions, 74% of Gen Y want the ability to conduct real-time P2P payments using their mobile phones and nearly half of the Gen X and younger boomer segments also want this capability, he says.

“As a result, financial institutions have a tremendous opportunity to establish themselves as the foundation for real-time money movement services, not only through the online channel but increasingly through the mobile channel,” Jabbour says.

FIS revealed the study’s initial findings at InfoShare 2013, the company’s annual conference for community institutions.