Digital Wallets and Bank Accounts Capture Consumer Rush to Instant Payments

Recent data underscores a durable trend: Consumers expect and demand instant access to their money, particularly for larger sums, and exhibit clear preferences for where this money lands — primarily their bank accounts and often digital wallets.

This imperative is not just about speed; it’s rooted in a deep-seated need for certainty and financial control, presenting both challenges and opportunities for disbursements. Drawing from a recent study by PYMNTS Intelligence and Ingo Payments titled “Digital Transformation and Instant Payments Fuel Business Disbursement Efficiency,” we explore insights into these evolving consumer behaviors.

Here are five takeaways:

Instant Payments Are Now the Standard for a Large Share of Consumers: The shift toward instant payments for nongovernmental disbursements has been dramatic. The share of consumers who report receiving these funds instantly most often has surged nearly tenfold since 2017, climbing from 4.1% to 38%. This isn’t just a marginal increase; it represents a fundamental change in how consumers experience receiving funds.

Larger Disbursements Fuel the Demand for Instant Payments: The data clearly indicates a correlation between the size of a disbursement and the consumer’s desire to receive it instantly. Consumers receiving disbursements averaging more than $500 are 33% more likely to use instant as their primary receipt method. This trend holds true across all types of disbursement categories.

This preference for speed with larger sums is often tied to underlying financial needs. Over half of consumers cite reasons related to financial need — such as covering bills, emergency expenses, essential items or debt repayments — as the most important factor driving their desire for instant disbursements.

For borrowing disbursements, 64% of receivers want funds instantly due to financial need. This highlights that for many consumers, receiving a larger sum instantly is crucial for managing their financial obligations and enhancing financial planning.

Urgency Is Driven by Financial Need and the Certainty of Funds: Beyond the size of the payment, a key driver for wanting instant disbursements is the urgent need for funds. A quarter of disbursement receivers say they need their funds in 30 minutes or less. While certainty that funds are immediately available is the top cited reason overall (32% citing peace of mind, with 18% saying it’s most important), aggregating all financially related reasons shows that financial need is the primary underlying driver for over half of consumers.

Younger generations and parents, who may face greater financial pressures, show a higher inclination for needing funds urgently. This intersection of urgency and financial need creates a strong pull toward instant access.

Banks Remain the Preferred Destination for Instant Funds: Despite the rise of alternative methods, consumers overwhelmingly prefer having their instant payments deposited directly into their bank accounts. This preference is cited by 35% of consumers.

Methods like Zelle and push-to-debit are popular because they facilitate this seamless integration with banking services. Consumers who already favor digital payments are more likely to receive instant payments frequently, and these instant receivers prefer direct bank deposits. This strong inclination towards bank accounts suggests a broader consumer desire for integrating instant funds into their existing primary financial infrastructure.

Digital Wallets, Especially PayPal, Are Growing in Prominence: While bank accounts hold the top spot for preference, digital wallets are emerging as a destination for instant disbursements. The use of digital wallets for instant payments has increased, with 15% of receivers using them most often in January, up from 7.8% a year prior.

This growth is fueled by PayPal, which 7.4% of receivers used most often for instant payments in January. The rising popularity of digital wallets for receiving funds instantly indicates that consumers value the flexibility and convenience they offer, particularly for quick transfers and easy spending.