First Citizens Bank has introduced a new service allowing customers to receive instant payments through the RTP (Real-Time Payments) network. This service will benefit both business and consumer banking customers by providing faster and more secure transactions. The announcement comes amid increasing demand for quicker and more efficient payment methods.
In the past, the transition to real-time payment systems has faced challenges, primarily due to the entrenched use of older payment methods and the complex technical requirements needed for adopting new technologies. Despite these hurdles, the growing adoption of RTP, particularly among larger enterprises with revenues exceeding $100 million, indicates a shift towards more agile financial transactions.
Benefits of Instant Payments
First Citizens Bank highlighted the advantages of the RTP network, noting that it allows recipients to access funds immediately. Matt Ribbens, the bank’s senior director of treasury management payment products, emphasized the significance of this development in the current financial landscape.
“In today’s fast-paced financial environment, customers need and appreciate the ability to receive money instantly without waiting for clearance or other transaction delays,” Ribbens said.
The bank is also working on enabling the capability to send instant payments via the RTP network, with plans to roll out this feature next year. This move is part of a broader trend where businesses and consumers are increasingly favoring real-time payments for their efficiency and convenience.
Growing Adoption Despite Challenges
A recent study shows that 68% of businesses plan to adopt instant payments through RTP or the FedNow Service within the next two years. Sectors like consumer retail, hospitality, and healthcare have shown significant interest, with many already recognizing the potential for better liquidity management and enhanced customer and vendor engagement.
“This enthusiasm spans various sectors, including 81% in consumer and retail, 75% in hospitality and leisure, and 70% in healthcare,” according to a PYMNTS report.
However, traditional payment methods remain resilient. Checks still account for a notable percentage of B2B payments in sectors like retail and real estate, indicating that while the benefits of instant payments are clear, the shift is yet to be universal.
The introduction of instant payments by First Citizens Bank marks a significant step towards modernizing financial transactions. The immediate access to funds not only enhances liquidity management but also provides a more efficient system for both consumers and businesses. As the bank continues to expand its real-time payment capabilities, it is poised to meet the increasing demand for faster and more reliable financial services.
