Article: Easier Instant Payments Mean Quickly Getting Cash to Your Customers
It’s no secret – in the age of COVID, many households are experiencing severe economic hardship. A recent CNBC article revealed that 63% of Americans reported living paycheck-to-paycheck since the start of the pandemic, 26% reported no stable income at all, and one-third opened a new credit card to take out additional debt to cover expenses. These same households hear on the news that banks are “flush with cash,” and they may wonder why more of that cash isn’t available to them in the form of personal loans or their own deposits. Some have turned to gig economy jobs to make ends meet, and many say they plan to continue these “side hustles” after the pandemic ends to rebuild savings and pay down debt, such as those credit cards. In this time of stress, community banks need to find new and better ways to help their customers to strengthen relationships and create new ones.
Customers may not always ask for instant payment solutions by name, but you may be able to help your customers by making it easier for these prefunded transactions to work for them to improve their cash flow. Banking has a long history of embracing new technologies going back to the rollout of debit cards in the ‘70s, widespread adoption of ACH in the ‘90s, and online and mobile banking in the new millennium. Adopting an instant payments solution that meets customers’ needs could be the next step in this evolution. For example, someone paid with a prepaid card or digital wallet such as PayPal or Venmo may need to wait a day or two while the funds travel to their checking account via ACH. If that same customer had access to an instant payment, such as a transaction on the RTP® Network, they would have their cash in seconds. And this happens using good funds that do not create payment risk for your bank.
When you’re ready for instant payments, Bankers’ Bank will be there to help by providing Funding Agent services for your bank, meaning we can help manage the required 24×7 liquidity to avoid declined transactions. We can also help you and your staff better understand instant payments, by providing advice on cores, timelines, and customer solutions we are seeing in the marketplace. Reach out to Todd Koehn, VP – Faster Payment Solutions, today at firstname.lastname@example.org or 614-400-1284.