FIS Study Projects Significant Revenue Potential with Real-time Payments Offerings

According to the second phase of a research study released by FIS, the world’s largest provider of banking and payments technology, people most sensitive to payment timing, such as outbound foreign money transfer users, are the biggest promoters of the real-time payments. Real-time payments helps people to manage their financial lives in better manner, offer a differentiated banking experience and provide additional revenue streams for financial institutions.

Global market research provider Ipsos Vantis conducted the research. The study assessed consumer sentiments and potential economic value for banks providing real time payments in four key market groups: outbound foreign money transfer users, account-to-account (A2A) transfer users, person-to-person (P2P) payment users and online bill payers. The purpose of the study was to better understand the challenges faced by consumers with payments and the potential benefits to institutions in providing real-time payments capabilities to corporate and end customers.

As per the study, 80 percent of overseas money transfer users consider their recipients’ ability to be able to use the transferred funds immediately as an important need. Also, 58 percent of A2A users and 41 percent of P2P recipients want to have immediate access to their funds.

According to the study, since financial institutions are the preferred place for customers to initiate real-time payments, there is a sense of urgency to seize the real-time opportunity now. The segment has potential for generating more than $1.1 billion in new fee-based revenues for large financial institutions (LFIs).

The study reported that consumers would use real-time payments if there is a way to do that through online banking or their mobile banking app. On average, overseas money-transfer users said they would use real time for 47 percent of those transactions, while A2A users project making 36 percent of their money transfers in real time and P2P users expect to use real time for 25 percent of their P2P transactions. Real time was also said to provide a channel for financial institutions to strengthen relationships with profitable consumers.

For outbound foreign money transfer and P2P services, 40% of survey respondents wanted the ability to access real-time applications through their mobile phones. For P2P payments, nearly as many Gen Y respondents prefer to use mobile phones to make real-time payments as those who prefer computers and laptops.

“The findings of our research and survey are clear – real-time money movement is resonating with the majority of consumers, and financial institutions have a tremendous opportunity to capitalize on the white space that real-time payments can provide,” said Anthony Jabbour, executive vice president, North American Financial Institutions, FIS, in a statement. “The research confirms that consumers are willing to pay for these real-time services and that mobile technologies will be a catalyst for adoption in this space. Helping financial institutions seize this opportunity is a key element of FIS’ broader payment vision.”