Faster Payments

Study: Business, Consumer Appetite for Faster Payment Options Grows

According to new studies by the Federal Reserve, a majority of businesses (83%) (PDF) and consumers (75%) (PDF) are already using faster payments, and most (66% of businesses and 61% of consumers) say they are likely to use faster payments more often in the future. In addition, 7 in 10 businesses and consumers say they prefer accessing faster payment services through their primary financial institution. 

In response to the 2022 survey, businesses highlighted the importance of flexible payment options and key features, such as automated payment capabilities and instant funds availability, to help them remain responsive in a changing business environment.  

Consumers continue to exhibit a preference for online banking options, with use of mobile payment apps increasing beyond expected groups such as millennials and Generation Z. Following this upward trend, 70% of consumers, including nearly 80% of people under 55, want and expect the financial institution(s) they use to offer faster payment services with key features, particularly real-time funds availability.  

“These findings underscore that demand for faster and instant payments is here to stay, and both businesses and consumers are looking to their financial institutions to keep pace with their needs. Meeting those needs will involve providing convenience and immediate availability of funds in a 24x7x365 environment, while also ensuring safety and security.”

Connie Theien,
Head of industry relations for Federal Reserve Financial Services

Businesses seek flexibility and options with faster payments 

As U.S. businesses navigate supply chain complexity, tight labor markets and rising costs, 62% noted cash flow management as one of their most impactful challenges and reported a need for greater flexibility and speed in their payment options. One in five businesses surveyed also indicated that speed and timeliness were the most critical features of faster payments that are needed for their success. 

Other key findings from the survey include: 

  • Payments being too slow (causing delays in processing) was the top challenge identified by businesses (28%), highlighting the need for improved cash flow.
  • Nearly half of businesses (45%) believe faster payments will lower their costs, mainly through more efficient processing with remittance data attached.
  • Three-quarters of businesses indicated it is important that their bank offers instant payments, especially true among larger businesses (86%-90%).

To learn more about key benefits driving faster payment adoption, read the full report of the business survey (PDF).

Consumers of all ages turn to mobile apps for banking, payments 

Mobile payment options were used by 74% of U.S. consumers in 2022, up from just 10% in 2013, and Generation X users (ages 35-54) caught up with millennials in use of mobile devices for banking activities. Following this trend toward online banking, over half of consumers (53%) are now using non-bank mobile apps to make faster/instant payments. 

Other key findings from the survey include: 

  • Consumers ages 35-54 now use smartphones more often than younger consumers (21-34) for activities such as checking account balances, making bill payments and account-to-account transfers.
  • Payments are becoming more embedded, as the percentage of consumers using one or more payment apps increased by about 50% between 2021 and 2022.
  • Consumers note a variety of situations where they could leverage instant payments, including person-to-person transfers (57%), account-to-account transactions (32%) and last-minute bill payments (30%).
  • Nearly 7 in 10 (69%) consumers think it’s important for their financial institution(s) to offer faster payment services.

Read the full report of the consumer survey (PDF) to learn more about consumer banking trends.

Get ready for the FedNow Service 

For more information about instant payments and the FedNow Service, visit FedNow Explorer (Off-site). To stay updated with the latest instant payment content, sign up to receive FedNow News (Off-site).