Bridging the Instant Payments Divide: Why Financial Institutions Must Act Now
By 2028, most financial institutions (FIs) will be able to receive instant payments, but far fewer will be able to send them. A recent U.S. Faster Payments Council survey shows that while 70-80% of institutions expect to receive instant payments, less than half will be prepared to issue them. This disconnect reduces the benefits of instant payments, and the resulting gap shows that institutions that drag their feet on payments modernization will be left behind in a competitive, fast-moving market.
Instant payments deliver significant advantages: immediate sending and receiving of funds, 24x7 operation, better liquidity access, and the opportunity to bring innovation to customers. FIs cannot meet customer demands for speed, reliability, and transparency without full functionality, and instant payments are the latest frontier in digital transformation. Failure to bridge this disconnect leaves FIs extremely vulnerable to more agile competitors, including both FIs and disruptive FinTechs, and puts their market share, customers, and internal talent at risk.
Action must start with a clear strategy. To avoid being left behind, institutions must assess their current systems and identify gaps that hinder instant payment capabilities. This assessment should include technical infrastructure, organizational readiness, and customer expectations. From there, they should prioritize investments in technology and partnerships that address these gaps effectively. Many FIs face internal hurdles in their quest for modernization, and limited human and technological resources will hinder progress and leave institutions susceptible to disruption. This is where strategic partnerships must come into play.
Causes of the Gap