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How Family Banking Can Boost Deposit Growth for Community Banks
Over the past few years, engaging with numerous payments industry experts and financial institutions has allowed us to unveil a myriad of myths about instant payments. Their invaluable insights into the future of payments have boldly shattered numerous myths surrounding instant payments. Shattering these misconceptions and embracing the realities is crucial for financial institutions to unlock the full, transformative potential of FedNow® and RTP®. Here are some top myths busted.
More than a third of RTP payments occur outside standard business hours, encompassing last-minute supplier payments, managed liquidity payments, and 24x7 payments from the gig economy.
The industry drives the innovation around use cases. Early wage access, daily payroll capabilities, weekend mortgage closings and treasury payments are the expected immediate use cases on the FedNow network.
ACH is proficient in meeting its intended use cases, and we haven't witnessed a significant shift away from ACH payments. Nevertheless, certain scenarios benefit from faster settlement than ACH and Same Day ACH. This is where instant payments step in, not to replace ACH but to complement it and address the need for speed in these specific situations.
The view on APIs is a bit pigeon-holed as a gateway to connect financial institutions to fintechs. However, APIs have a wider remit - they make it extremely easy to integrate your existing products and services to faster payments, allowing you to take leverage the competitive advantage of instant payments.
You meet more of your customer needs with the "send" side. It's crucial to plan to allow your customers to send payments instantly via multiple applications across wholesale banking, consumer applications and SMBs. APIs are vital for making this happen.
Many businesses are awaiting instant payments to overcome several pain points they currently have. As the network grows and we reach ubiquity, they can leverage the data that ride on the rails and remittance information, which can ultimately simplify the back-office operations at the end of the day.
Customers can instruct banks to send instant payments from their bank account, and with intelligent routing solutions, banks can select the most appropriate payment rail to reach the destination account quickly and efficiently.
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