American FIs prepare for faster payments revolution

The vast majority of American financial institutions are experiencing, or soon expect to experience, a demand for faster payments, according to a survey from the Center for Payments.

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American FIs prepare for faster payments revolution

Editorial

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Despite this, of the more than 700 FIs and third-party senders quizzed, only a third currently have a payments strategy in place to help set payment priorities, inform decision making and focus resources.

Generally speaking, respondents are unsure about their overall readiness for the faster payments evolution and 56% report using multiple sources of information to drive their strategy.

The survey also suggests core systems providers stand to lose market share to third-party vendors. Only 55% of respondents are confident core-providers will provide the products necessary to respond to payments industry changes and 76% are willing to use a third-party vendor for additional products and services.

"These findings reinforce that US financial institutions are quickly realising that faster payments solutions are becoming mainstream and they are actively preparing for the opportunities and challenges these solutions present," says Bill Schoch, chair of the Center for Payments.

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Comments: (1)

Gerard Hergenroeder

Gerard Hergenroeder Retired IBMer and Banking Executive at Payments Shark

Faster Payments will have a major impact on U.S. payments systems. Wire transfer, check and even credit and debit cards will experience disintermediation. The major banks will create their own connections with emerging Faster Payments networks; while, smaller institutions will continue to use third party processors. There will be multiple networks for Faster Payments as it is with credit and debit cards today. The evolution of Faster Payments services will first be P2P followed by B2B, then lastly C2B. Financial instutitions need to envision what payments will be 10 years from now; and then the plan accordingly. Everything will change including application systems, customer interactions, marketing and rules/regulations. Institutions need to prepare a payments plan including specific roadmap actions along with appropriate investment funding.

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