Faster Payments

FPC Payments Barometer: Industry Accelerates Faster Payments Amid COVID-19

Despite a tumultuous year, progress and innovation in the payments industry persists. According to the 2nd annual Faster Payments Barometer (Off-site) published by the U.S. Faster Payments Council (FPC), 59 percent of payments stakeholders say that COVID-19 has not impacted their plans to implement faster payments. In fact, nearly 4 in 5 respondents are either accelerating or maintaining faster payments implementation plans.

U.S. Faster Payments CouncilRespondents of the survey represent a broad range of industry members, inclusive of financial institutions, core processors, payment network operators, business end users, acquirers, fintechs and more. Most of these payment system stakeholders (75 percent) consider faster payments a “must have” and 77 percent have already used or enabled at least one faster payment method.

In addition to highlighting the importance of faster payments, respondents named several challenges hindering adoption:

  • Interoperability was a frontrunner, with nearly half (48 percent) citing it as the top challenge. Respondents agreed, however, on the overall significance of interoperability – 92 percent said it was either somewhat or very important.
  • High upfront costs and complexity to implement were cited as key challenges by 44 percent of respondents.
  • Internal business justification was cited as a challenge by about one-third (34 percent) of respondents.

When comparing last year’s Faster Payments Barometer, the top two challenges remained the same for respondents. However, 35 percent of respondents also mentioned “lack of common rules and standards” in the previous survey.

Common Use Cases

Understanding how organizations plan to use faster payments offers valuable insight into the functionality required to reach meaningful business solutions. The Barometer survey found using faster payments for disbursements/payouts is top of mind for stakeholders, followed by consumer bill pay and person-to-person (P2P) payments. These findings differed slightly year-over-year, when bill payment was cited as the priority use case, followed by P2P and e-commerce.

Payments Progress at the Federal Reserve

The Federal Reserve continues its collaborative efforts with the industry, including the FPC, to advance the U.S. payment system. In support of faster, or instant payments, the Fed is actively developing the FedNowSM Service (Off-site) to promote nationwide reach for instant payments, with a focus on understanding the needs of payments stakeholders. Watch the video below featuring Ken Montgomery, FedNow program executive, to learn more about the exciting future of payments.