Many financial institutions remain hesitant to adopt real-time payments due to concerns over legacy system upgrades, fraud risks, and customer demand. A PYMNTS Intelligence report explores these barriers and the importance of partnerships and rethinking consumer interest to drive wider adoption of real-time payment solutions.
Real-time payment systems have been slow to gain widespread adoption in the U.S. financial sector, despite a 7% increase in payment volume on the RTP® network in Q2 2024, according to The Clearing House.
According to a PYMNTS Intelligence report, “Overcoming Obstacles to Widespread Real-Time Payments Adoption,” in collaboration with The Clearing House, many financial institutions (FIs) remain reluctant to embrace real-time rails, citing concerns about the costs of upgrading legacy systems, potential fraud risks, and misconceptions regarding customer demand.
This report examines these barriers and shows how FIs must explore strategic partnerships and reassess consumer interest and the benefits of real-time payments.
A major obstacle for banks in implementing real-time payment systems is the high cost and complexity of upgrading legacy infrastructure. According to the report, 34% of banks believe their core systems, some dating back to the 1970s, cannot manage the speed and volume required by real-time payments. Another 34% expressed concern about their systems’ ability to support 24/7 availability, with downtime potentially leading to customer dissatisfaction.
Fraud concerns also hinder adoption, with 36% of financial institutions unsure how to oversee refund requests for authorized transaction fraud. Unlike traditional transactions, real-time payments are often irreversible. Experts note push payments — used exclusively on instant payment rails — are more secure, as they require authorization from the account holder. Banks are advised to use advanced technologies like artificial intelligence to detect and prevent fraud.
To alleviate the financial and operational challenges of implementing real-time payment systems, many FIs use third-party payment providers for assistance. According to the report, 44% of banks plan to build their real-time payment capabilities outside their current payment systems, with smaller institutions especially likely to seek third-party partnerships. These collaborations can help smaller banks overcome the technical and financial barriers of upgrading their systems.
A notable example is Frost Bank, which partnered with Finzly to integrate both RTP and FedNow® Service capabilities into its existing infrastructure. By using Finzly’s technology, Frost Bank successfully integrated real-time payments and scaled its systems more easily, benefiting both corporate and retail customers. This partnership demonstrates how third-party providers can assist institutions of all sizes in bringing real-time payments to market more effectively.
Despite concerns that their customers may not be interested in real-time payment options, FIs are overlooking the demand for such services. According to a joint study by Finzly and the U.S. Faster Payments Council, 90% of FIs believe that customers would benefit from instant payments, but only 65% think that customers would actually adopt these methods if they were offered. An ongoing issue is most FIs do not yet provide access to platforms like the RTP network or FedNow Service, even though 64% of corporate bankers report demand for these services.
The reluctance to implement real-time payments may be driven by the fear that such services could cannibalize existing revenue streams, with 32% of bank executives expressing this concern while experts argue this assumption is largely unfounded. While customers may be drawn to banks offering real-time payment solutions, they are unlikely to switch institutions solely for this feature. In fact, not providing real-time payments could push customers toward competitors who offer these options.
The business landscape is challenging, but firms are increasingly flush with innovations designed to beat back any operational challenges with cutting-edge tech.
Artificial intelligence, for example, has become a linchpin of modern financial operations, reshaping processes from fraud detection to credit risk assessment. As companies warm toward harnessing AI-powered algorithms, efficiency and precision are being positioned at the forefront of operational improvement.
At the same time, B2B payments are undergoing a parallel transformation.
Legacy systems, which often relied on manual processes and paper-based invoicing, are being replaced by streamlined, digitized platforms. Businesses are turning to integrated payment solutions that enhance efficiency, security and transparency.
What is the reason for the accelerating digital transformation of back-office technology stacks and payment workflows?
A prominent root cause is the ongoing uncertainty afflicting the business environment. This includes escalating trade tensions marked by the imposition of tariffs, which have introduced a wave of hesitation across various sectors, impacting middle-market companies.
As economic uncertainties persist, financial management has become paramount, and, as the B2B news this week shows, few things support agile decision making and real-time forecasting better than the digitization of previously manual workflows.
Read also: AI Agent Systems Are Here — Will They Transform B2B?
One of the trends in B2B is the integration of AI-powered solutions to enhance operational efficiency. The adoption of agentic AI solutions is being explored to empower chief financial officers and treasurers by enabling autonomous financial decision making and operational efficiency.
Payments technology firm Transcard announced Tuesday (April 1) that it added agentic AI capabilities to its vendor network management solution. The changes to the company’s SMART Exchange are designed to streamline payment interactions between buyers and suppliers, with agentic AI automating onboarding and know your business (KYB).
Tesorio added an AI agent for supplier portals to its platform for accounts receivable automation, collections and cash flow management Thursday (March 27). The company’s new Supplier Portals Agent autonomously manages portal-based invoicing, from invoice submission to payment tracking, eliminating the need for finance teams to submit and track invoices across portals, a task that Tesorio said has become “one of the most manual, fragmented and error-prone parts of the AR process.”
AI-driven platforms can offer CFOs and treasurers insights and analytical capabilities, helping them navigate complex finances. The collaboration between agentic AI and financial operations is one potentially poised to unlock growth by empowering executives to make data-driven decisions with greater confidence.
See also: How CFOs Can Solve for Resource Bottlenecks in Back-Office Innovation
Beyond AI, the B2B sector is witnessing innovation in payment systems and risk management. Mastercard, for instance, launched a program Monday (March 31) aimed at encouraging the adoption of virtual cards for commercial payments. The initiative seeks to provide businesses with a more seamless, consumer-like experience, particularly in the realm of digital transactions.
Meanwhile, EasyPost on Tuesday introduced Forge, a B2B shipping solution designed to optimize logistics and reduce costs for enterprise clients. The development highlights the growing demand for specialized solutions that address the unique needs of B2B commerce, where efficiency and cost-effectiveness are paramount.
Risk management remains a concern for businesses operating on a global scale. To address this, Zip, also on Tuesday, rolled out a supplier risk management solution aimed at helping organizations assess and mitigate potential vulnerabilities in their supply chains. As geopolitical tensions and supply chain disruptions persist, such tools are key for maintaining operational resilience.
See also: What Treasurers Can Learn From How Central Banks Approach Risk
The ongoing evolution of FinTech is also shaping how businesses manage their assets and navigate economic uncertainties. A growing number of treasurers are turning to unconventional assets like bitcoin and gold as part of broader capital allocation strategies. The trend reflects a desire for diversification and a hedge against currency volatility, particularly as inflationary pressures and geopolitical risks continue to loom.
For CFOs, the challenge of maintaining financial visibility in a volatile environment is ever-present. Enhanced financial visibility tools are proving essential in navigating tariff uncertainties and ensuring liquidity management remains robust. These tools empower executives to forecast potential disruptions and respond proactively rather than reactively.
Supply chain transparency is another area receiving heightened attention. Inspectorio’s partnership with Open Supply Hub aims to promote greater transparency through open data platforms. The collaboration is intended to enhance accountability and ensure that sourcing practices adhere to evolving regulatory and ethical standards.
Looking forward, the question is not whether these technologies will continue to gain traction, but rather how quickly and effectively they will be adopted at scale.
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