Latest news with #fasterpayments
Forbes
4 days ago
- Business
- Forbes
Financial Institutions Can Align With Businesses On Faster Payments
Reed Luhtanen is the Executive Director of the U.S. Faster Payments Council, a membership organization focused on advancing faster payments. What is good for the goose is good for the gander, right? What is good for one, is good for all? In some instances, this might be the case, but not when it comes to faster payments and what businesses need to support faster payments adoption. Faster payments adoption by both businesses and financial institutions has been steadily climbing over the past five years. In 2019, the Faster Payments Barometer revealed that less than half of industry organizations had adopted some form of faster payments. Fast forward to 2025, and 80% of respondents to this year's study consider faster payments a 'must have.' Take, for instance, financial institutions. Not only have they adopted faster payments, but they are leveraging multiple channels to do so. In fact, the 2025 Faster Payments Barometer showed that nearly 90% of financial institutions have or plan to implement FedNow; nearly 64% have or plan to implement RTP; and over 55% have or plan to implement Zelle. Additionally, among the financial institutions that have implemented instant payments, 58% implemented both FedNow and RTP. And new developments are forthcoming: More than 90% of planned faster payments implementations will occur in the next two years. Businesses, too, are interested in faster payment solutions—with 66% reporting they are likely to use instant payments if offered by their primary financial institution. However, their adoption of faster payments has not advanced at the same pace. A recent report indicated that only around 40% of large businesses are using RTP, demonstrating that the rate of adoption by businesses remains slower when compared to financial institutions. This differential stems from a disconnect between financial institutions' priorities and businesses' needs. Consider that the 2025 Faster Payments Barometer revealed that financial institutions are most interested in offering faster payments for person-to-person (P2P) payments, bill payment and payroll, while businesses hope to leverage faster payments for e-commerce, point-of-sale transactions and supplier/invoice payments. Similarly, there is a sharp contrast between the challenges experienced by both audiences. Financial institutions grapple with the high implementation costs, with roughly 60% citing this as the top challenge, while only 38% of nonfinancial institutions do. For nonfinancial institutions, the top challenge is a lack of ubiquity and interoperability (60%), while only 36% of financial institutions see it as a challenge. This disconnect also contributes to businesses' dissatisfaction with the progress of faster payments: Less than 30% of businesses feel as though the United States is making satisfactory progress toward a faster payments future. Yet, while discontent may exist, businesses still believe in the value and benefit of faster payments. Sixty-seven percent consider faster payments a must-have. From cost savings and increased cash flow to enhanced customer service and greater efficiencies, the value prop for business adoption is obvious. And as a key facilitator of faster payments, financial institutions can serve as the conduit to deliver the faster payments experience businesses want and need. Financial institutions need to consider ways to better engage their business audience while not losing sight of institutional priorities. For instance, bill pay is a use case important to financial institutions. And request-for-payment (RfP) is the most important enhanced offering cited by nonfinancial institutions. As the key player in connecting billers and customers through banking platforms, financial institutions can focus efforts on enabling RfP for business customers, meeting business needs while enhancing the bill pay offering. Implementing RfP also supports businesses' desire to use faster payments for supplier/invoice payments. Even businesses' desire for interoperability is something financial institutions can work toward supporting (and already are). By adopting both RTP and FedNow, financial institutions play a role in growing the overall faster payments ecosystem. By doing so, they increase the number of end points able to access faster payments, growing the opportunity for interoperability. Additionally, by offering both platforms, financial institutions provide businesses with greater reach to the customers they are seeking to serve, aiding in meeting their desire for a more universal, faster payments experience. When it comes to faster payments, financial institutions and businesses have different priorities and concerns. But those differences do not have to divide the two audiences. By understanding the needs of businesses, financial institutions can realign efforts to meet businesses' needs while remaining steadfast in addressing organizational goals and objectives. So, what is good for the goose might not necessarily be what is good for the gander, but through understanding, both the goose and gander—financial institutions and businesses—can agree upon solutions to advance faster payments in the United States. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Finextra
14-05-2025
- Business
- Finextra
The US Faster Payments Council publishes guide to building an open alias directory
The U.S. Faster Payments Council (FPC), a membership organization devoted to advancing safe, easy-to-use faster payments in the United States, today published a new industry resource from its Directory Models Work Group: Decision Points for an Open Alias Directory. 0 The report presents critical considerations for the development of an open, alias-based directory service that could simplify and accelerate faster payments in the United States. The new report builds on the group's prior foundational work on directory services, offering tangible insights into how such a system might operate in practice. It explores architectural frameworks, implementation models, and key decision points—such as the types of alias values that can be used, how alias ownership can be established, and how queries and responses should be structured. The goal is to guide industry stakeholders who may be interested in developing or contributing to such a capability. 'The Directory Models Work Group has made the case that a directory service is a valuable resource to speed adoption of faster payments in the complex U.S. payments ecosystem,' said Peter Tapling, Managing Director of PTap Advisory, LLC and FPC Directory Models Work Group Chair. 'This report takes the next step to provide some material guidance to industry participants who would be inclined to develop such a capability.' In addition to mapping out technical and operational considerations, the report examines multiple design models including redirector, forwarder, and concentrator configuration, and highlights the trade-offs of each. It emphasizes the importance of flexible architecture, clear governance, and thoughtful user experience design to ensure the success of any future implementation. 'A developer of an alias-based payments directory has many architectural decisions to make, such as what to allow for an alias, how much data to store in the directory, what information is required in a query and what is returned in response to the query,' said Lou Grilli, Vice Chair of the Directory Models Work Group. 'For each of these decision points, there are no right or wrong answers, but it is important to consider the pros and cons of each.' The considerations detailed in the report come at a time when the demand for seamless, secure faster payments experiences continues to grow. As the industry explores ways to increase interoperability and reduce friction, this resource offers a framework to support informed decision-making and future innovation. 'At the FPC, we bring stakeholders together to solve complex industry challenges,' said Reed Luhtanen, FPC Executive Director and CEO. 'This report demonstrates the value of that collaboration by translating broad concepts into concrete guidance that can help turn the vision of a truly open directory into reality. By identifying the key decisions and trade-offs involved, it equips industry leaders with the insight needed to move from exploration to execution.'
