Real-Time Gap: Consumers Wait as Banks Tackle Legacy Payments Tech

Faster payments have loomed large in financial services through the past couple of years — and with the uncertainty of tariffs and inflation, speedier payments have a broad range of desirable traits.

There’s a surety that comes with instant funds, a visibility into cash flow that’s not there when it takes a transaction days to settle. Instant payments are available around the clock.

But as detailed in the report “Instant Satisfaction: How Real-Time Payments Can Help FIs Win Consumer Loyalty,” there’s a gap between what’s on offer and what consumers want from those financial institutions (FIs) when it comes to real-time options. In order to cement customer loyalty, forward-thinking banks must fill that gap, or individuals will, quite literally, vote with their feet.

Of the FIs that enable instant payments, 93% already have seen their efforts bear fruit, as the offerings help boost loyalty and customer retention.

At a high level, banks have paved the way for larger firms to access the benefits of instant payments — where the volumes and the dollar amounts are large. The data show that 80% of FIs enable enterprises to send instant payments, while only 58% allow consumers to do so. Against that backdrop there’s still a widening use by consumers of instant payments. A separate study indicated that 73% of consumers worldwide used instant payments in the past 90 days — and on a more granular level, the number of individuals sending more than five to 10 instant payments per month increased nearly 5% in 2024.

The study finds 73% of banks say they grapple with the legacy infrastructure that’s in place, which hampers the ability to deliver those payments (because they are rooted in batch processing), indicating that the transformation toward instant payments is not a demand problem, but what might be termed a supply issue.

Gap Widens With Smaller FIs

The gap mentioned above is even more pronounced with smaller financial institutions, a roster that includes community banks and credit unions. Among that population of smaller banks, 79% offer instant payment sending capabilities to enterprises, lagged by the 44% who do so for consumers. Connectivity is a factor, as our joint research shows that larger FIs, with $10 billion in assets or more, are “more” connected to real-time rails, which of course, are the determinant as to whether funds can be sent instantly at all. Larger FIs, we found, are six times more likely to be connected than smaller brethren to real-time payment rails, including the RTP network from The Clearing House (TCH).

As for the use cases that are top of mind, FIs are cognizant of what needs to be tackled first and what consumers want. Sixty percent of the banks surveyed said they’re examining consumer bill payments and P2P payments for instant functionality. Drilling down a bit, 60% of FIs are geared to innovate P2P receiving capabilities, while 49% are focusing on enabling sending functions for those payments.

A significant percentage of FIs have not yet ventured into the concrete planning stage — as 30% of banks said that they haven’t set instant payments in motion due to the fact that they’d not yet developed pricing models (which means they are leaving some revenue on the table).