Banks Risk Market Share Loss Without Instant Payment Options

While real-time networks like The Clearing House’s RTP® network have surpassed 1 billion transactions, a critical gap persists.

The PYMNTS Intelligence report “The Real-Time Leap: Closing the Gap Between Receiving and Sending,” a collaboration with TCH, found that financial institutions (FIs) have enabled real-time payment receipt, but few offer the ability to send funds instantly.

This imbalance limits the full potential of these advanced networks and leaves customer expectations unmet.

This year’s instant momentum will necessitate banks leaping from merely receiving to fully enabling send-and-receive capabilities. FIs that do not implement sending alongside receiving risk losing market share to competitors.

This shift is not just about keeping pace; it’s about seizing opportunities for growth and maximizing return on investment.

The report revealed several use cases that will underpin that momentum.

Bill Pay and Beyond

One of the most compelling use cases for real-time sending capabilities is real-time bill pay. The report found that 52% of FIs offering instant transactions cited bill pay as a driver of customer interest in sending real-time payments. Providing this instant service offers an incentive for customers, potentially drawing them away from FinTechs that offer similar digital payment suites.

Beyond customer acquisition and retention, instant bill pay also opens new revenue opportunities for banks. This capability meets an immediate customer need for greater control and speed in managing their finances, transforming a typically delayed process into an instantaneous one and maximizing an FI’s return on investment.

Another use case for real-time sending is peer-to-peer (P2P) payments. The ability to send money instantly to individuals has become a consumer expectation, especially given the proliferation of dedicated P2P payment providers. For banks, offering robust P2P sending capabilities is less about pioneering a new service and more about adopting a key defensive strategy.

FIs that fail to provide this functionality risk customer churn and diminished relevance in the competitive payments landscape. This capability ensures banks remain central to their customers’ daily financial interactions, strengthening loyalty and preventing them from seeking solutions elsewhere.

The Challenges

FIs frequently cited integration complexity, the absence of developed pricing models and high costs as primary reasons for not enabling real-time payment sending. The report found that 88% of banks indicated that implementing sending capabilities was too expensive. Concerns about data theft and fraud were also obstacles, with 14% of FIs citing fear of data theft as their “most important” barrier.

FIs can overcome these barriers through strategic approaches. Using modern APIs and cloud-based payment platforms can streamline adoption and minimize expensive overhauls.

Addressing pricing concerns can involve piloting new fee structures for high-value use cases beyond bill pay and P2P, such as instant account-to-account (A2A) transfers and expedited loan disbursements, which offer new revenue streams. To mitigate fraud risks, FIs should concentrate on comprehensive customer education, embedding robust security features like one-time passwords and push notifications, and partnering with technology providers offering strong fraud and risk controls.