Nonbanks Lead Expansion Into Real-Time Payments

Real-time payments are emerging as the modern standard for transactions that are not only fast and efficient but also convenient.

By cutting down transaction times from days or hours to mere seconds, these instantaneous payment systems are reshaping how money moves across the globe.

The PYMNTS Intelligence report “Real-Time Payments World Map,” a collaboration with The Clearing House, found that while much of the initial development and adoption of real-time payments has been driven by traditional financial institutions and specialized payment platforms, a trend is the entry of nonbank entities into faster payments.

Their participation signals a new era for real-time payments, promising widespread adoption and further innovation.

Among the most visible nonbanks making the leap is retail giant Walmart, which is poised to roll out its own real-time pay-by-bank option this year, building on a successful test conducted in September.

The initiative marks an evolution from Walmart’s existing ACH-based pay-by-bank service, launched in 2024, by facilitating the instant transfer of money directly from shoppers’ bank accounts to Walmart. The immediate appeal for a retailer like Walmart is multifold. Primarily, it offers a direct pathway to avoiding costly card interchange fees, an operational expense for businesses handling millions of transactions daily.

Widespread Appeal

The foray into real-time payments also brings challenges, such as the need to explore robust solutions for transaction disputes, an area that has historically posed difficulties for real-time payment rails.

The motivations driving nonbanks into real-time payments align with the broader benefits these systems offer across the financial ecosystem. For businesses, including large retailers, the shift to real-time processing translates into immediate payment validation and accelerated cash flow with guaranteed funds. This ensures that money is available almost instantly, improving liquidity and operational efficiency.

Moreover, real-time payment solutions can lead to streamlined data management and enhanced data security through the use of aliases rather than sensitive bank account details, as demonstrated by pioneering efforts like Truist Financial Corporation’s alias-based Request for Payment (RfP) solution on the RTP® network.

Beyond the direct benefits of accelerated funds and security, real-time payments also promise operational improvements.

Merchants benefit from faster payouts, improved cash flow, the earlier release of goods and reduced processing costs. Innovations such as Balance’s Instant Bank Connection, using real-time rails to simplify ACH setup, directly address long-standing hurdles like multiday verification delays, making the payment process more efficient for buyers and beneficial for merchants.

The global expansion of real-time payment systems underscores the inevitability of this trend. From North America, with the United States establishing its system in 2017, to South America, where countries like Brazil have had systems since 2002, and across Europe, Africa, the Middle East and Asia Pacific, real-time payments infrastructure is already live in numerous nations.

This widespread adoption creates opportunities for nonbank innovation, as businesses seek to use established rails for competitive advantage and improved customer service.

The entry of prominent nonbank players including Walmart is not merely an isolated development; it signifies a pivotal moment in the evolution of real-time payments. Their ability to directly engage consumers and bypass traditional intermediaries has the potential to accelerate the mainstream adoption of instant payments.