An investor funds their investment account in real-time. A trade executes in seconds. But transferring funds from that account to a bank account can still take five business days. It is a paradox that Karen Webster, CEO of PYMNTS, put directly to Justin Zhao, head of Visa Direct, North America, in a recent conversation about why investment platforms still struggle with something as fundamental as moving money in and out of their platforms.
The answer is not about demand. Customers clearly want speed. The problem lies elsewhere: in legacy infrastructure, in risk perception, in institutional inertia and in the difficulty of replacing payment plumbing while the house is still occupied.
The Five-Year Migration That Never Ended
Zhao spoke about legacy systems with the familiarity of someone who has lived through them.
“I joined at year two of a fixed-income trading platform migration and left at year three, and it was not done,” he told Webster. The project ultimately took five years.
That story is not an outlier. Financial infrastructure was built for a different era, and modernizing it means touching core systems that firms are reluctant to disturb. So, they patch, work around and defer. Checks still get mailed. ACH still takes days. Customers wait.
Webster has experienced this firsthand. She described trying to move money between brokerages, a process that involved a paper check being sent through the mail between two sophisticated financial platforms.
Zhao recounted a similarly frustrating experience of his own.
“I was trying to figure out what an IBAN was, what a routing number was, where to find them in the mobile experience, and then being told it would be there in one to five days,” he said. “It was extremely painful.”
Investment platforms have modernized trading, but the movement of money into and out of those platforms has not kept pace.
The Hidden Costs
Zhao told Webster that firms typically only see part of the true cost of slow payments.
“It is an extra step to evaluate the entire cost of a payment rail; not only monetary, but also from a customer retention perspective and from the call centers,” he said. “You have to put all of that together to give a holistic view of the value of implementing real-time payments.”
The call center dimension is significant. When funds leave one account and do not appear in another for several days, customers call repeatedly. Those calls carry a cost, and they erode trust in ways that are difficult to recover. PYMNTS Intelligence data reinforces this. A large share of payouts at investment platforms still travels over traditional rails, and payment status inquiries remain among the top sources of operational strain at these firms.
The Risk Illusion
When Webster asked Zhao why firms continue to rely on checks, wires and ACH despite their shortcomings, compliance and risk concerns came up repeatedly. Real-time¹ payments are perceived as riskier, the thinking goes, with less control and more exposure.
Zhao challenged that assumption directly.
“When people think about [real-time] payments on a card rail, they think it may be riskier or a compliance challenge,” he said. “But if you think about an ACH transaction with a 90-day dispute window, or a paper check that can get lost, the compliance challenge is one that we can address very quickly.”
The tools available around real-time rails are more sophisticated than many firms realize. Account validation, balance verification, and real-time decisioning all wrap around the payment and can make the transaction cleaner, not riskier. Risk teams approved checks long ago because checks were familiar. Familiarity, it turns out, is not the same thing as safety.²
‘When You Offer It, People Will Use It’
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The most compelling data point Zhao shared with Webster was not about cost savings or compliance. It was about what happens when firms actually give customers a real-time option. He described the experience of a large retail brokerage that implemented Visa Direct’s capabilities. Adoption of real-time money movement reached 51% of users.
“We know it is not an adoption issue,” Zhao told Webster. “When you offer it, people will use it.”
Customers aren’t resistant to change. The constraint has been on the platform side, in the inertia, the migration timelines and the misread of risk. Demand has been waiting for supply to catch up.
A Widening Competitive Gap
Newer investment platforms do not carry the legacy infrastructure burden. They were built on modern rails from the start and are gaining share as a result. Crypto platforms, prediction markets and newer digital brokerages move money quickly, and customers notice. For established firms, the question is no longer whether to modernize but how quickly they can do so before the gap becomes harder to close.
“Every point of friction you can remove increases your competitiveness,” Zhao told Webster.
Platforms that offer real-time access to funds make it easier for customers to hold balances there, which is central to how investment platforms compete for assets.
Real-time payouts have crossed from differentiator to expected standard. Platforms that treat the payout as secondary will feel the consequences in retention, in call center volume and eventually in assets under management. The technology is available.
Customer demand is clear. The business case, when all costs are counted, is strong.
As Webster observed in her conversation with Zhao, the expectation of speed is now embedded in how customers evaluate platforms. Infrastructure that has not kept pace is no longer invisible. It has become a competitive liability.
¹“Actual fund availability for all Visa Direct transactions may depend on receiving financial institution, account type, region, compliance processes, along with other factors, as applicable.”
²“Visa Direct clients and participants [should always consult and seek approval from their internal compliance teams on sanctions screening controls and processes, and] are solely responsible for their own compliance with applicable laws and regulations. Optional compliance controls and risk management tools and services are provided solely for the convenience of [sending acquirers, service providers, merchants, and recipient issuers / the Visa Direct clients and participants,] and Visa makes no warranties with respect to them or their results. [Visa Direct clients and participants are solely responsible for their own compliance with applicable laws and regulations.]”
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