US Banks Say Instant Payments Need ISO 20022 Standard to Scale

The pandemic has pushed payors and businesses across various industries to accelerate their digital transformation efforts, especially as a rising number of consumers expect faster and faster payment experiences, regardless of use case. For example, one recent PYMNTS study found 46% of consumers would choose to receive disbursements instantly if possible, showing that offering such options could be key to keeping consumers engaged and satisfied.

Supporting the payment experiences their customers want may be more difficult for today’s companies — many firms or payors still have not taken the steps necessary to optimize their payments infrastructure to allow for speedy transactions, leading to frictions. Figuring out how to innovate their underlying infrastructure and what technologies can aid them should therefore be a top goal of companies, regardless of industry.

In the latest Disbursements Tracker®, PYMNTS takes a look at how instant payments are becoming the norm across multiple industries worldwide. It also analyzes how automation and other emerging technologies are proving key to their continued expansion.

Around the Disbursements Space

Businesses, as well as consumers, are examining the benefits of instant payments as a way to both streamline internal processes and increase customer engagement. One recent study found that 87% of European insurance firms are moving to digitize their operations to improve customer experiences, for example. The report also found 34% of these companies were specifically looking to innovate their digital payment abilities, indicating offering swift and convenient payments is becoming more important for such businesses to remain competitive. As such, examining the role instant payment tools are likely to play in the insurance space in the next few years may present a key advantage for these companies.

However, offering the instant payment options that both consumers and firms have come to expect requires payors to take careful steps. Payors that fail to upgrade their infrastructure may find they lack the capacity to support digital disbursements at the necessary scale, Drew Edwards, CEO of Ingo Money, explained during a recent PYMNTS interview. In another study, two-thirds of consumers noted they would look to meet their payment needs elsewhere if not offered instant payment options, showing supporting such services is becoming essential for payors. As such, payors cannot afford to remain reliant on legacy infrastructure, especially as more and more consumers are placing a higher value on seamless payment experiences, Edwards explained. Because of this, investing in new digital infrastructure and technology is a must.

For more on these and other stories, visit the Tracker’s News and Trends.

Valley Bank on Eliminating the Roadblocks to Instant Payments

Interest in instant payments has increased over the past few years as United States businesses and consumers alike become more familiar with these solutions, but there are still several challenges that financial institutions (FIs) must meet before they can reach full ubiquity in the market. This includes ensuring different technological systems can communicate easily, explained Orlando Santos, senior vice president and director of treasury products for Valley Bank.

To learn more about how disbursement expectations are shifting in the U.S. market and the frictions that could be preventing their expansion, visit the Tracker’s Feature Story.

Deep Dive: How Automation and Digitization Can Keep Instant Payments’ Growth on Track

While the impacts of the pandemic have shown the benefits of embracing instant payments for organizations in various industries, supporting such solutions requires investment in new technologies.

Companies wishing to offer the smooth, seamless disbursement experiences consumers of the future are expecting must look to tools such as artificial intelligence (AI) or automation to keep their instant payment processes running as they should. Figuring out how to leverage these technologies will likely prove key for payors as the need for instant disbursements continues to grow sharper.

To learn more about how payors can tap AI or automation to make instant payments a reality for their customers, visit the Tracker’s Deep Dive.

About the Tracker

The Disbursements Tracker®, a PYMNTS and Ingo Money collaboration, is the go-to monthly resource for the latest trends and changes in the digital disbursements space, covering developments occurring in the government, insurance and retail sectors, as well as instant payments adoption’s global progress.