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New Federal Reserve survey underscores growing consumer demand for faster payments

Consumers are seeking faster payments in more areas of their increasingly on-demand lives, with four out of five saying they are interested in faster options to pay businesses, according to a survey released by the Federal Reserve Banks. About 70% say having access to enhanced faster payment capabilities from their financial institution(s) is an important satisfaction driver.

“From recurring payments to last-minute bill pay, consumers are looking for faster payment options that give them more control over the timing of their transactions with businesses,” said Connie Theien, senior vice president and head of industry relations for the Federal Reserve System. “These findings suggest that providing consumers with safe, efficient instant payment methods for business transactions needs to be a key industry priority.“

With instant payments, which are a type of faster payments, a payee’s account is credited within seconds of payment initiation, enabling them to have immediate access to funds and allowing payers to know exactly when their money has reached its destination. This can ease the concern of late fees and gives consumers the ability to pay bills exactly when they are due.

The demand for faster payments spans age groups and has intensified in the wake of the COVID-19 pandemic, according to the survey. Person-to-business payments (P2B) top the list of likely use cases for faster payments (77%), followed by person-to-person (P2P) and account-to-account, both at 62%.

The Federal Reserve’s FedNowSM Service will allow financial institutions of all sizes to offer safe and instant payment services for their customers when it launches in 2023. In addition to the growing demand for faster payments to businesses, the survey shows P2P continues to be one of the strongest use cases for instant payments, which validates our direction for the FedNow Service.
Nick Stanescu
FedNow Service Business Executive
Federal Reserve Bank of Boston

Other key findings from the consumer survey included:

  • Nearly seven out of 10 use mobile payment devices to send or receive payments.
  • Nearly 80% are interested in leveraging faster payments to pay businesses.
  • More than 60% want a real-time view of their account balance and immediate posting of payments they initiate.
  • 83% are using a fintech payment app or digital wallet at least occasionally to complete transactions, including 71% of those 55 and older.

The survey also found that the COVID-19 pandemic was a notable driver for changes in consumer behavior, prompting many to place greater importance on online commerce, contactless payments, fraud monitoring, paying down debt and increasing savings.

A full report on the survey can be found here (Off-site).