PYMNTS asked industry executives across the payments and digital commerce landscape to give us their take on the pivotal shifts, technological advancements and strategies that have shaped business in 2023. Ingo Money CEO Drew Edwards says instant payments are poised for rapid expansion in 2024.
In the ever-evolving landscape of payments, the demand for innovative solutions that foster growth opportunities for clients has become more pronounced than ever.
The trajectory of instant payment technology, a gradual ascent over the years, is poised for rapid expansion in 2024.
We find ourselves at a tipping point, where instant, reliable and secure payment transactions are becoming not just a desire, but a consumer expectation. The shift is fueled by a change in awareness of what’s both possible and practical, brought on by adoption by some key players.
The shift toward a gig-based economy has been a catalyst for transformative changes in how people get paid. Technological advancements have allowed companies to transition from check-based disbursements to instant payments, leapfrogging traditional ACH methodologies.
Early adopters from the gig economy played a pivotal role in unlocking the potential of instant payments, enabling gig workers to receive their earnings essentially in real time. This not only eliminated the need for businesses to hold large amounts of cash, but also set the stage for broader instant payment adoption across a variety of industries.
As the gig economy embraced instant payments, smokestack industries took notice. The appeal of seamless, instantaneous transactions led sectors with conventional payment practices to explore their own potential adoption of instant payments, both to enhance workforce satisfaction and reduce check-issuing expenses.
This trend has led to a wider recognition of the advantages of instant payments across a diverse set of industries. There has been a mindset shift, an understanding that it’s to nearly any company’s advantage to embed instant payments, in industries ranging from trucking and hospitality to gaming and real estate.
Some have even embraced the idea of monetizing instant transactions for increased revenue — a trend that will only grow in the coming years.
Going beyond push-to-card and real-time payments rails, forward momentum in instant payments is being fueled by the launch of the FedNow® Service, the instant payment system introduced by the Federal Reserve in July.
This government-led payment initiative marks a strategic move toward modernizing state financial infrastructure. Its adoption signals a broader acknowledgment of the importance of instant payment technology, as well as its security and reliability, even on a government scale.
The launch of FedNow has acted as a stamp of legitimacy for the instant payment revolution, further influencing businesses across industries to explore possibilities for their own operations.
Instant access to money is fast becoming a consumer expectation. As companies head out of a COVID-constrained economy and seek new opportunities to streamline growth, instant payments have captured their attention.
2024 is more than just a continuation of this trend — it may be the year when instant payments become an integral part of the financial landscape, reshaping transactions and redefining how businesses and individuals interact in the digital era.