This is an exciting time to be in the business of payments. The industry is taking bold steps to create faster, safer solutions for a variety of personal and business payment needs. In fact, the technology for faster payments, including same-day and real-time, exists and is available to provide broad value to the marketplace.
Having same-day capability for virtually any ACH transaction, for example, opens up tremendous benefits for anyone who wants to move money, as well as a tremendous amount of information right with the payment, faster. But to fully accelerate the U.S. payments system, industry leaders need to examine the rapidly changing landscape and offer ubiquitous solutions to further the mass adoption of faster payments.
There is strong business and consumer demand for and use of faster payments, prompt transfers and immediate transactions. Take for instance Same Day ACH for credit payments, which became a reality in September 2016, as one of the first true examples of putting faster payments in action in the marketplace.
Transaction volume for Same Day ACH since implementation has been strong, with 13 million transactions through the end 2016. Business-to-business transactions also saw significant use, making up 32% of overall Same Day ACH volume. Yet, according to the SMB Technology Adoption Index, 97% of small businesses in 2016 said they still cut paper checks to their business vendors and receive checks from their customers.
So even though the case for faster payments is picking up steam, more industry collaboration is required to further innovation and advance adoption to improve the payments industry and the way we do business.
Current and emerging solutions could offer substantial benefits in terms of faster availability, more efficient and transparent information exchange through APIs, and more payments options for consumers, businesses, government entities and financial institutions. To propel these developments forward, however, private-sector players need to work with one another in new ways and find areas of commonality to deliver on desired ubiquity, consistency and transparency where it best serves the market and customers. Such collaboration would challenge the status quo and drive the pace of faster payments innovation well into the future.
The road to faster payments has been long. The exciting news is that faster payments solutions are here to replace the nation’s reliance on inefficient, slow and costly physical transactions.