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Real-Time in Real Life: The Evolution of Real-Time Payments in the U.S.

The growth and maturation of real-time payments throughout the world has predictably led to a rapid rise in challenges to solve, opportunities to exploit and questions to answer. In this new series, “Real Time in Real Life,” I am joined by leading experts to explore the evolution of real-time payments and how these payments will impact and influence the lives of everyday consumers.

In the first installment, we explore real-time payments in the United States, with insights from Connie Theien, director and SVP of industry relations for The Federal Reserve, Elena Whisler, SVP, sales and relationship management for The Clearing House and Laura Weinflash, VP, product management for Early Warning, the owner and operator of the Zelle Network®.

U.S. real-time payment use cases

While the U.S. is hardly a mature market in terms of its real-time development, especially when considered against world leaders such as India, the U.S. real-time payments market has seen accelerated growth in the past few years. This has been driven largely by B2C and P2P payments, which include popular payment channels such as Zelle®.

“Really, the last year or so has accelerated the trend of being paid once you’re done with your work,” said Elena Whisler. “We really see it transforming how being paid lets individuals get on with their daily lives. We’ve seen payroll processors step up to support this shift. It’s quite exciting.” Additionally, she adds that digital wallets are proving to be a significant contributor to the growth of real-time payments.

For Laura Weinflash, the growth of Zelle® shows that there is a large demand for real-time payments, especially from small business owners. She cites 157 percent year-on-year Zelle® usage growth from small businesses, accounting for a large portion of the $120B processed by Zelle® during the second quarter of this year. “They love the fact that payments are instant, secure and tied directly to their business checking account.”

The pandemic spurs real-time payments adoption

Necessity may be the mother of invention, but it is also the accelerator of adoption. Globally, the demand for more real-time and digital payments was spurred by lockdowns and the need for contactless payment options.

“The pandemic itself has been a very big tipping point in consumer behavior but has also provided a business motivation to look at modernizing payment processes and services,” said Connie Theien. For Theien, modernization relies on greater industry collaboration to solve new, more complex business needs surrounding the development of real-time payment offerings. She recommends that the industry focus on more holistic solutions for end-to-end processes, which will in turn create better experiences and drive more demand for real time.

But another demand generator is simply the fact that consumer behaviors are unlikely to change post-pandemic. The large shift that has been seen from both consumers and businesses is more or less a preview of what’s to come. As Whisler points out, knowing that tomorrow will continue the behaviors that we’ve put in place over the last year or two years is a clear sign that the U.S. payments market has forever changed.

View the full episode, as these experts expand on the adoption of real-time payments, discuss the growing use cases and share their thoughts on the development of FedNow.

A discussion with Connie Theien of The Federal Reserve, Elena Whisler of The Clearing House and Laura Weinflash of Early Warning, moderated by Craig Ramsey of ACI Worldwide.

Want to learn more about FedNow? Download this exclusive field guide for banks, examining the strategies for success and the key questions top organizations answer to meet their objectives.

For more information on real-time payments, view our industry guide exploring the key questions and benefits banks, merchants and billers must consider when it comes to all things real-time.  

Head of Real-Time Payments, Product Management

Craig has over 25 years' experience working with banks throughout EMEA with their corporate payments and banking needs. He has been with ACI for over 12 of those years, providing specialist consulting to wholesale banking customers. Through the initiatives of the Euro, SWIFTNet, CLS, TARGET, TARGET2, SEPA, and UK Faster Payments (amongst others), Craig has helped customers leverage the power of the ACI solutions to ensure that the business needs are met. Craig is currently Head of Real-Time Payments, Product Management. Working with customers, prospects and industry players alike, he helps to ensure that ACI's products are industry-leading and are always ready to help our customers.