New FIS Study Reveals Strong Consumer Demand for Real-time Payments from Financial Institutions
- The majority of consumers view their primary financial institution as the first choice for real-time payment services.
- Mobile devices will accelerate the adoption of real-time payment services.
- Consumers indicate high levels of interest in using real-time payments for a significant portion of their transactions.
JACKSONVILLE, Fla., April 17, 2013 − Offering real-time payments can increase banking convenience and help consumers better manage their financial lives, according to a comprehensive research study released today by FIS™ (NYSE: FIS), the world’s largest provider of banking and payments technology. Among other findings, the report reveals that consumers look to their primary financial institutions as their first choice for real-time payment services.
The study, conducted by global market research provider, Ipsos Vantis, on behalf of FIS gauged consumer sentiments about the ability to instantly authorize and settle transactions in four key market groups: outbound foreign money transfer users, account-to-account (A2A) transfer users, person-to-person (P2P) payment users and online bill payers. The study sought to better understand the challenges consumers face with payments and how real-time payments can solve them. It also examined how real-time payments influence how consumers choose payment methods.
Overall, the study underscored that real-time payments resonate with consumers and that the immediate availability of funds is very important, both from a sender and a receiver perspective. To that end, 80 percent of overseas money transfer users believe it’s important for their recipients to be able to use the money they send to them immediately. Also, 58 percent of A2A users and 41 percent of P2P recipients want to have immediate access to their funds. “It’s peace of mind. It’s less stressful to know the funds are there right away,” stated a survey respondent.
Other key findings include:
- Trust in financial institutions: Fifty-five percent of those surveyed prefer to get real-time payment services from their primary financial institution rather than a credit card or alternative payment provider. The majority of consumers agreed that real-time payments would make banking more convenient and help them manage their money better.
- Strong adoption potential: Consumers reported they would use real-time payments – if available through online banking or their mobile banking app – for a significant percentage of their transactions. Online bill payers who currently use expedited payments estimate, on average, they would use real-time bill payment through their online banking or mobile banking app to make real-time payments for 71 percent of their expedited bill payments going forward. On average, users of overseas money transfers say they would use real time for 47 percent of those transactions, while A2A users project making 36 percent of their money transfers in real time and P2P users expect to use real time for 25 percent of their P2P transactions.
- Reaching the mobile consumer: Four out of 10 survey respondents who use outbound foreign money transfer and P2P services want to be able to access real-time applications through their mobile phones. For P2P payments, nearly as many Gen Y respondents – those 18 to 33 – prefer to use mobile phones to make real-time payments as those who prefer computers and laptops.
“The findings of our survey underscore the fact that real-time money movement is clearly resonating with the majority of consumers, and particularly with key consumer segments like Generations X and Y,” said Anthony Jabbour, executive vice president, North American Financial Institutions, FIS. “The research confirms that mobile technologies will be a catalyst for real-time payment adoption. For example, among consumers who conduct person-to-person transactions, 74 percent of Gen Y want the ability to conduct real-time P2P payments using their mobile phones and nearly half of the Gen X and younger boomer segments also want this capability. As a result, institutions have a tremendous opportunity to establish themselves as the foundation for real-time money movement services, not only through the online channel but increasingly through the mobile channel. Helping FIs seize this real-time opportunity is a key element of FIS’ broader payment vision.”
“Evolving channels, payment networks and the nature of payment itself are creating a need for broadened real‐time capabilities,” said Beth Robertson, senior payments consultant at Javelin Strategy & Research. “Innovation must adapt to support the dynamics of today’s 24/7/365 channels.”
The first of a three-part series, the study’s initial findings are being unveiled on April 17 at InfoShare 2013, FIS’ annual conference for community institutions. The second phase of the study, tailored to large financial institutions (LFIs), will be unveiled at the company’s annual conference for LFI clients in May and focus on ROI opportunities for that segment. The final phase will be released in the summer and will disclose more detailed findings about consumer behaviors and payment preferences.
The study’s research method was comprised of qualitative research with focus group respondents, including overseas money transfer users, followed by a national quantitative survey with 1,508 adult financial decision makers who conduct their banking online or through mobile apps.
FIS (NYSE: FIS) is the world’s largest global provider dedicated to banking and payments technologies. With a long history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100 countries. Headquartered in Jacksonville, Fla., FIS employs more than 35,000 people worldwide and holds leadership positions in payment processing and banking solutions, providing software, services and outsourcing of the technology that drives financial institutions. First in financial technology, FIS tops the annual FinTech 100 list, is 425 on the Fortune 500 and is a member of Standard & Poor’s 500® Index. For more information about FIS, visit www.fisglobal.com.
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