The U.S. payments ecosystem is undergoing a rapid transformation. In response to a rising demand for faster, safer, and more intuitive transactions across the board, financial institutions are increasingly looking to modernize their operations in a variety of ways, including through the adoption of real-time payments technology.
As part of our ongoing efforts to better understand how mid-tier banks and credit unions are approaching payments modernization, Volante surveyed payments professionals from 80 financial institutions in the first quarter of 2022 to learn more about the current state of their operations, as well as how they expect to adapt to the evolving ecosystem in the future.
Over the next several weeks, we will be sharing data highlights from this report.
The Real-Time Payments “Revolution” is Alive and Well
In order to address rising transaction volumes and increase efficiency, more institutions continue to express interest in or have already adopted real-time capabilities.
Most integrations of real-time payments are happening through The Clearing House’s (TCH) real-time payments (RTP) network, which currently reaches 61% of DDAs in the U.S. and has seen nearly a 50% increase in transaction volume over the past year. Of the respondents surveyed, 27% report already being connected to RTP—almost double the result from last year’s survey—and 45% report having active plans to connect in the future. Moreover, over a third of those with plans to connect have committed to do so within the year, and it’s expected that over half of mid-tier institutions will be utilizing the network in 2023.
Beyond TCH RTP, our survey also revealed growing interest and anticipation of FedNow, the Federal Reserve’s own instant payment network set to go live in 2023. While 49% reported being unsure of whether they would utilize the service, nearly 30% reported plans to connect within the first year of FedNow’s launch, including 13% who said they would be connecting immediately upon its release.
To get a more in-depth look at the state of payments modernization across US mid-tier institutions, download a complimentary copy of the full report here.