We have been following the recent developments in real-time payments with some interest. While adoption is increasing it is not going as fast as many industry observers had hoped.
Why?
According to American Banker, many banks have been working towards receiving funds but have not done the work to start sending real-time payments. And therein lies the problem.
It is more complex and therefore more expensive to create the technology to support sending and receiving. And if a bank is not set up to send a real-time payment on FedNow it cannot receive a request-for-payment either. And this is a key selling point for FedNow and RTP.
So, banks are mostly waiting on the sidelines until they are forced to move due to customer expectations. Eventually, all large and regional banks will be on board and then there will be pressure on everyone else to move.
But we are likely years away from that tipping point.
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