This yahoo! Finance publication discusses a recent telephone survey of payment transaction specialists at mid-tier US banks and credit unions, in which the results suggest that payment volumes executed through the RTP system of the clearing house are set to increase dramatically over the coming year. We have been following developments around RTP since its launch at the end of 2017 as the first new American payment rail in 40 years. In our newest member research Covering all faster payouts and real-time use cases, we forecast around 55% CAGR in general for faster payouts from 2020 to 2024, with an even higher growth rate for RTP. This benchmark survey, which was commissioned by Volante Technologies, a New Jersey-based enterprise payment technology company, indicates that many small and medium-sized institutions are finally freeing up resources to connect to RTP.
Volante Technologies, the global leader in cloud payments and financial messaging, today revealed the results of its Payments Modernization Survey for Mid-Tier Banks and Credit Unions in the United States with Assets between $ 2.5 billion and $ 25 billion. The results show that real-time payment connections are expected to triple over the course of the year and that cloud-based payments as a service (PaaS) is a growing industry priority …. The study, conducted in the first quarter of 2021, samples a significant portion of the market segment at three levels. It highlights the urgent need to improve productivity to support increasing payment volumes and the complexity of maintaining multiple payment platforms. The challenges cover all types of payment, from domestic, real-time and ACH transfers to cross-border payments. ‘
The full survey can be downloaded from the referenced article via a link provided. In addition to the RTP data, there are a number of results that interested readers can check out. Perhaps a surprising conclusion is that the upcoming ISO 20022 conversion for Fedwire and CHIPS is only mentioned as a challenge by only 10% of respondents, which seems rather low to us. This could mean that it is not yet a priority since the conversion dates have been delayed by COVID. It’s also worth noting that although 15% of those surveyed are already logged in to RTP and 45% plan to do so within the next year, 40% of those surveyed had no intention of logging in. This could mean that many are waiting for FedNow to launch in 2023 or currently cannot justify a business case for real-time payments. The survey also indicates great interest in the PaaS delivery model, which again reinforces a growing movement of banks towards cloud-based operations. Worth a visit to see.
“Financial institutions are looking to streamline their operations to prepare for the potential prevalence of 24/7 real-time payments and the increased operational complexity this will bring,” said John Farrell, SVP Global Product Management, Volante Technologies. “There is a strong desire for capabilities related to digital transformation, ranging from increased automation to improved reporting and lower operating costs. “
Insight by Steve Murphy, Director, Commercial and Corporate Payments Advisory Services at Mercator Advisory Group