The Federal Reserve Banks are in the process of testing the new instant payments system and plan to make the new system live with some early participants in July.

“We see some incredible interest in FedNow,” said Glenbrook Partner Elizabeth McQuerry, who presented the early look at the results during a panel at the Nacha conference Sunday.

The biggest potential use case for faster payments systems was in person-to-person payments, with 49% citing that purpose, the preliminary survey results showed. Following that, respondents said they were also interested in the systems for payment disbursements, 46%, and for bill-pay purposes, 45%.

Business-to-business use hasn’t been as popular, but the demand for that kind of implementation will likely grow after P2P adoption picks up, said Tristan Thompson, a director at Arvest Bank, during the panel discussion.

The most “troubling” aspect of the results was the low rating the peer-to-peer payments system Zelle received with respect to companies that plan to implement it in the future, McQuerry said.

Nonetheless, when it came to faster payments systems that had already been adopted, Zelle ranked second, with just under 80% saying they had implemented it, behind only same-day ACH payments, which about 85% of respondents said they had implemented already. 

The issue of ubiquity as a challenge was similar to findings in prior surveys on the topic, as was the concern about high upfront costs, McQuerry said. The survey was the fourth such “barometer” reading on faster payments that Glenbrook has undertaken in cooperation with the Faster Payments Council. A prior report was issued in 2021.

A high percentage of respondents, 71%, said it was “very important” for faster payments to achieve interoperability with other such systems, according to the results released.

The survey said 30% of professionals queried were associated with financial institutions while about 28% were at payments facilitators, including core bank processors, merchant acquiring processors and fintechs. The remaining respondents were with other payments players and business end-users, among others.

The results were presented at the conference as a teaser to a deeper dive into the results that will be shared in June, McQuerry said. There wasn’t a methodology for the survey provided with the initial results.

By Lynne Marek on April 17, 2023
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