“We’re getting to a point where real time payments are going to become commonplace.”
Brandon Spear, CEO of TreviPay, made that statement to PYMNTS on the heels of news that the Federal Reserve has started onboarding the first participants to the FedNow Service pilot program.
The goal of the trial run, as PYMNTS reported this week, is to establish seamless connectivity and ensure that technical and operational functionality is ready for full end-to-end testing later this year.
Read Now: Federal Reserve Onboards First Participants in FedNow Pilot, Including Square
The announcement represents a clear signal that faster payments are going to be offered — and desired, in broad-based fashion, said Spear.
Having access to the RTP network, said Spear, “is going to be incredibly valuable to any player in the FinTech space.” And, Spear added, the initial roster of organizations taking part in the program — 120 firms — includes a broad array of enterprises.
“It’s good to see that this is not just about traditional banks — there are other players who have been part of the testing process,” Spear told PYMNTS.
Valuable for FinTechs
As reported, newer companies including Square Financial Services and Q2 Holdings have joined the program. To be part of the pilot, both companies had to meet requirements for instant payment capability in addition to other factors.
Pilot organizations will continue to onboard with the service over the next few months — and as Spear said, “there is still additional work to be done.”
The FedNow pilot comes just after news that there’s a separate pilot program ongoing, this time for immediate cross-border (IXB) payments. That pilot is being launched by EBA CLEARING, SWIFT and The Clearing House (TCH). Several banks have already signed on.
Read Now: Cross-Border Real-Time Payments Pilot Launched by EBA, SWIFT, TCH
And as reported separately, surveys by the U.S. Faster Payments Council showed that 86% of study respondents — a group made up of FIs, FinTechs, payment network operators and other entities — have already begun using faster payment services. And 85% of respondents said they plan to invest in at least one additional faster payment system in the next two years. As PYMNTs detailed, Most respondents also indicated they believe faster payments will soon extend to cross-border transactions, with 90% anticipating this development within five years. Faster payment solutions look as though they’ll become ubiquitous in the larger financial ecosystem.
PYMNTS data show that 40% percent of credit union members are “very” or “extremely” interested in real-time payments, according to the “Credit Union Innovation Playbook,” a PYMNTS and PSCU collaboration. Drilling down a bit, 61% of millennials say that they are “very” or “extremely” interested in real-time payments.
“It is genuinely exciting for the whole industry,” Spear noted in his recent comments to PYMNTS.