Support for Realtime Payments Increases Among Banks

PREMIUM – More U.S. banks are awaking to the idea that supporting realtime payments (RTP) could add value not just to their customers, but to their revenues.

A new report titled “2018 Global Payments Insight Survey: Cross-Vertical,” from ACI Worldwide and Ovum released today shows that 86% of banks expect to see improvements in their customer service as a result of realtime payments. To put that number in context, last year only 61% believed that to be true. 

Preparing for realtime payments is an extensive task for a bank. Third-party service providers like ACI Worldwide, Finastra and core processors like Fiserv or Jack Henry are providing banks with the necessary ingredients to build a system, so the onus of realtime integration falls on the bank’s innovation prowess to create a competitive product around RTP. One way to do this is through APIs, said Jordan Lampe, head of strategic projects at payments platform Dwolla, who recently spoke to Bank Innovation how banks can achieve this (more on this here).

And indeed, banks are realizing the potential of APIs in the context of realtime payments. In fact, the ACI Worldwide report shows that 87% of banks said they have already have plans in place to develop open APIs for the RTP initiative. This number is up 59% from a year ago, based on the report.  

In the report, Alex Hoffmann, senior vice president, ACI Worldwide, said:

Open banking and real-time payments are set to shape the payments industry in a big way, and the potential upside to both consumers and businesses is enormous. The Ovum survey has shown that retail banks, billing organizations and merchants are already beginning to experience the benefits and see the advantage of investing in the future of these technologies.

And it’s not just the banks that have high hopes for RTP. The survey found that at a global level, 82% of billing organizations with annual revenues of $5 billion and 92% of merchants believe that realtime payments will improve customer service, and thus positively impact revenues. Last year, only 48% of billing organizations and 59% of merchants agreed with that. 

ACI commissioned Ovum to conduct the survey, which was done between December 2017 and January 2018. Ovum ran a 22-question survey across a global panel of 1,032 executives, with a focus on retail banks, billing organizations and merchants  in 19 countries, resulting in 225,000 separate data points on current perceptions.

Read the full report here.