Federal Reserve Surveys: U.S. businesses, consumers want faster payment options to help navigate evolving needs
May 24, 2023
CHICAGO – Facing a dynamic and increasingly on-demand, online environment, a majority of businesses (83%) and consumers (75%) 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, according to new studies released today by the Federal Reserve. In addition, 7 in 10 businesses and consumers say they prefer accessing faster payment services, such as instant payments and same-day ACH, through their primary financial institution.
As U.S. businesses navigate supply chain complexity and other economic obstacles, 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.
In addition, 57% of U.S. consumers expressed interest in using faster payments to pay friends and family, up from 52% two years ago. Additional use cases of interest include last-minute bill payment (30%), transferring money between accounts (32%) and e-commerce (25%).
“Access to faster payment options, including instant payments, is now seen as indispensable rather than a nice-to-have,” said Connie Theien, head of industry relations for Federal Reserve Financial Services. “Given the move to a 24/7 economy and strong, growing use of faster payments, it is timely that the Federal Reserve’s FedNowSM Service will be available in July for financial institutions of all sizes to use to provide instant payment services to their customers.”
Both businesses and consumers express a desire for their financial institutions to play a role in providing payment solutions. Seven in 10 businesses and consumers indicate it is important that their primary bank or credit union offer faster payments, including nearly 80% of consumers under 55 years old who want and expect the financial institution(s) they use to offer faster payment services.
Other key findings from the surveys include:
- Use of mobile apps for faster payments is on the rise, particularly among consumers ages 35-54
- Nearly half of businesses (45%) believe faster payments will lower their costs
- Most consumers (74%) have used mobile payments, up from 10% a decade ago
- Businesses cited bill payments (36%) and payroll (32%) as top use cases for faster/instant payments
Full reports of the corporate and consumer surveys can be found here: Business Research Brief (Off-site, PDF), Consumer Research Brief (Off-site, PDF). The surveys were conducted by Federal Reserve Financial Services, which also markets faster payment services such as the FedNow Service and FedACH® Services.
About Federal Reserve Financial Services
Federal Reserve Financial Services is an integrated organization within the Federal Reserve that is responsible for managing critical payment and securities services that foster the accessibility, integrity and efficiency of the U.S. economy. Through its relationships with about 10,000 financial institutions nationwide, the Federal Reserve provides equitable access to a system that facilitates more than $5 trillion payments each day. Federal Reserve Financial Services, delivered via a secure FedLine® network, include FedCash Services, FedACH® Services, Check Services, Fedwire® Funds and Securities Services, the National Settlement Service and more. The Federal Reserve also collaborates broadly with payments stakeholders on improvement initiatives (Off-site), to advance the end-to-end speed, security, efficiency of domestic and cross-border payments. This collaboration led to and has informed development of the upcoming FedNowSM Service, an instant payments infrastructure launching in 2023 that will become part of the FRFS product offering.