As consumer demand for instant payments soars, it may seem counterintuitive that financial institutions (FIs) are likelier to offer these services to large businesses than to consumers. Because businesses often have higher transaction volumes and a greater need for immediate funds to manage cash flow, the benefits of offering real-time payments to commercial clients may appear more compelling to banks. In taking this approach, however, banks may miss out on unique opportunities to gain consumer satisfaction and customer retention.
Research shows that nearly three-quarters of consumers globally have used instant payments in the past 90 days. Nevertheless, FIs primarily cater to enterprises over individuals in their real-time payment offerings. Smaller banks and credit unions are even more likely to favor enterprises, despite their traditional focus on building strong relationships with consumer clients. As consumers expect faster transactions in their daily lives, FIs that fail to meet this demand could risk losing customer loyalty. Lessons learned from working with enterprise clients can inform best practices for scaling consumer real-time payments.
Consumers Expect More, but Banks Lag
For consumers, real-time payments are shifting from novelty to necessity. Still, FIs remain focused on large businesses, leaving many individuals without access. Smaller banks and credit unions lag even further.
Surging demand is driving record transactions on real-time rails.
The year is shaping up to be a banner one for real-time payments. The Clearing House’s RTP® network surpassed 1 billion transactions in January, 18 months after crossing the 500 million mark. By comparison, the earlier milestone was five years in the making. According to The Clearing House, this surge reflects extraordinary demand from all parties, including consumers, businesses and the financial community.
80%
of FIs enable enterprises to send instant payments, while only 58% allow consumers to do so.
While 69% of businesses predict instant payments will be highly transformative for commercial payment processes over the next five years, consumers also increasingly expect real-time payments to be widely available. An October study found that 73% of consumers worldwide used instant payments in the past 90 days. Moreover, their adoption continues to rise as more consumers send instant transactions each month. For example, those sending more than five to 10 instant payments per month increased nearly 5% in 2024 to more than one-quarter (27)% of consumers.
Consumers tend to take a back seat in banks’ instant payment offerings.
Despite this growing demand, banks overwhelmingly favor businesses — and especially large enterprises — over individuals in offering instant payment capabilities. PYMNTS Intelligence research shows that FIs are nearly 40% more likely to allow enterprise clients to send instant payments than individuals, at 80% for enterprises versus 58% for consumer clients.
Meanwhile, smaller FIs such as community banks and credit unions, despite their consumer focus, do no better. They are even more likely to prioritize large businesses over consumers in these services, with 79% offering instant payment sending capabilities to enterprises versus just 44% to consumers. The question is why. In part, it’s simply because larger FIs, defined as those with assets greater than $10 billion, are more likely to be attached to an instant payment rail at all — by a factor of six. Still, FIs, and especially smaller ones, say that of all instant payments use cases, they are most interested (60%) in becoming more competitive in the consumer bill-pay and peer-to-peer (P2P) space. Clearly, there is a disconnect between FIs’ current offerings and what they would like to provide.
FIs Must Overcome Hurdles to Instant Payments Adoption
Operational challenges, security concerns and a lack of planning slow FIs’ adoption of instant payments. To gain the unique benefits of offering these payments to consumers, FIs must address these issues.
Operational challenges hold FIs back.
35%
of FIs say they do not offer instant payments to customers because the technical integration is too difficult.
Banks, especially smaller ones, still face obstacles in offering instant payments to consumers. According to PYMNTS Intelligence data, the most significant reason for FIs not enabling their customers to send instant payments is that the technical integration is too difficult, cited by 35%. Legacy infrastructure remains a major barrier. Nearly three-quarters (73%) of FIs cite moderate to severe challenges with legacy systems in sending instant payments. Many systems were designed for batch processing, making real-time settlement difficult. Integration costs are also an important barrier, cited by 29% of FIs not offering instant payments. Upgrading technology and addressing operational inefficiencies are essential for FIs to realize instant payments’ potential fully.
A lack of planning stands in the way.
After operational challenges and even before costs, a lack of implementation planning stands out as a surprisingly significant reason for FIs’ lack of instant payment offerings. More than 30% of surveyed FIs said they have not enabled instant payments for their customers because they have not developed pricing or business models for these features. As more consumers seek instant transactions, institutions that fail to adapt may struggle to compete. FIs, especially those with fewer assets, must prioritize developing clear plans that include pricing and business models for adopting instant payments.
FIs worry about fraud, data theft and liability.
For many other FIs, worries about operational risks account for their hesitance to upgrade. PYMNTS Intelligence data indicates that concerns about data theft and fraud risks deter 23% and 22% of FIs, respectively, from offering instant payments to customers. Some FIs may well worry. Consumers expect strong fraud protections, and failure to deliver can drive them elsewhere. Nineteen percent of United States consumers say they will change banks if dissatisfied with how fraud is handled. Making matters more urgent, banks also face growing pressure to refund scam victims. Sixty-six percent of consumers believe banks should reimburse scam losses always or most of the time. Institutions that fail to provide adequate protections risk higher complaint volumes, reputational damage and customer churn. FIs must invest in resources to manage security concerns proactively and effectively to reap the benefits of offering consumers instant payment capabilities.
Instant Payments Drive Retention and Revenue
Banks that offer consumer instant payments see stronger customer satisfaction and retention, with more FIs looking to innovate these capabilities to drive engagement and revenue.
Instant payments boost customer satisfaction and retention.
Consumers expect faster, seamless transactions, and FIs recognize instant payments as drivers of customer satisfaction. According to PYMNTS Intelligence research, more than half of FIs (55%) note greater customer satisfaction with real-time payments than with methods such as automated clearing house (ACH) and checks. In addition, 93% of FIs that enable instant payments say they have a positive impact on customer retention. A separate PYMNTS Intelligence study found that instant payments make consumers 11% more satisfied than non-instant methods and nearly double their likelihood of remaining clients. Moreover, a 2024 consumer banking report revealed that 78% of consumers see instant payments as the most imperative digital feature for banks to offer in the next three years.
Innovating consumer P2P payments opens new revenue streams for FIs.
Beyond retention, consumer instant payments can serve as revenue drivers for banks. Expanding instant capabilities could allow FIs to capture payment flows that exist outside their current ecosystems. A survey found many FIs citing consumer bill payments and P2P transfers as key real-time payments use cases for attracting and retaining customers. Most payment executives surveyed (52%) viewed consumer-facing instant payments use cases to be the top priority for 2025, with corporate and embedded business-to-business (B2B) applications far down the list at 31% and 18%, respectively.
PYMNTS Intelligence research confirmed that consumer use cases for instant payments such as P2P transfers and bill payments are fueling FIs’ interest in instant payments innovation. Sixty percent of FIs are looking to innovate P2P receiving capabilities, while 49% are focusing on enabling sending.
Winning Consumer Loyalty in Real Time
Financial institutions that enable or expand consumer instant payment offerings can strengthen customer relationships, drive revenue and stay competitive in an evolving digital landscape. Consumers increasingly expect fast, seamless transactions, and banks that fail to meet this demand risk losing customers to FinTechs and digital-first providers. However, outdated infrastructure, a lack of planning, and security concerns remain obstacles to broader adoption.
PYMNTS Intelligence recommends the following actionable roadmap for FIs to address these challenges:
- Develop strong business plans for instant payments adoption that include technology upgrades. If modernizing legacy systems is overly complex, partnering with payments-as-a-service (PaaS) providers or turning to instant rails such as the RTP network and the FedNow® Service can simplify the process.
- Plan to expand instant payments availability beyond enterprises to serve individual consumers. Using real-time payments for consumer P2P transactions and bill payments, for example, can drive engagement and revenue.
- Enhance fraud detection and data protection measures to build trust and ensure transaction security. Educate consumers on security measures to boost confidence in using instant payments. If liability concerns remain a barrier for sending, consider implementing real-time rails for receiving-only capabilities so that consumers can benefit from these features.
Consumers know what they want from their banks: instant, reliable and secure payment experiences. FIs that proactively address these priorities will improve customer satisfaction and position themselves as leaders in digital banking.
