Why Instant Payments Are No Longer Optional for Credit Unions
Today, immediacy is not just a nice-to-have but an expectation, Jon Budd, CEO of Juniper Payments, a Velera company, writes in a new PYMNTS eBook, “The New Value Equation: 11 Financial Services Leaders Share Their Vision for 2025.”
Financial services are evolving faster than ever due to technology advancements and the industry’s willingness to ‘re-think’ the payments infrastructure. At the same time — and an impetus for financial institutions’ continued evolution — consumers are connected, tech-savvy and expect more when it comes to their digital user experience. As Karen Webster put it, we now live in an on-demand economy where the expectation (no matter the use case, ranging from food delivery services to shipping, among others) is immediate.
Velera is always seeking to help credit unions and industry partners evolve, and today, immediacy is not just a nice-to-have but an expectation. In 2025, we will continue to prioritize helping financial institutions modernize and accelerate their payments capabilities.
The introduction of the FedNow® Service in 2022 gave financial institutions the ability to send and receive final and irrevocable funds instantaneously, at any time, representing an advancement from the previous fastest payment (wire transfers). While most FIs today rely on a batch process to send and receive payments, instant payments (from FedNow and The Clearing House’s RTP® network) operate 24/7/365 — a leap forward in the banking and payments infrastructure.
A few months ago, I tasked my 18-year-old son with “adulting” by finding and opening a new account. When it came time to fund his new FI account (A2A transfer) from his other FI account (lawn-mowing savings), he threw his hands up in the air and asked what micro-deposits are and why it would take five days for his money to move. While this was my opportunity to whiteboard my life’s work, my son unfortunately did not have the patience. Now, if both FIs were instant payments participants, it would have taken seconds.
While the industry is at the infancy of instant payment innovation, we are seeing solid adoption from FIs of all sizes. At Juniper Payments, we have been focused on the seamless integration of fraud controls and real-time risk scoring within our payments hub. Effective guardrails and actionable data will help build confidence for FIs to promote this service to their members and clients.
Businesses of all sizes are excited to use instant payments when they learn about the benefits. The ability to collect revenue quicker, hold onto money longer and make payments later is attractive for any business. These businesses could be a customer of your financial institution, but they will also most assuredly drive consumer adoption. They will promote innovation and use cases we haven’t even contemplated yet.
The adoption of instant payments will continue to accelerate, and we want to be the partner that helps community FIs understand the importance of entering the space, as well as how to do it safely and effectively. As instant payments become our new reality, now is the time to explore and understand how this new payment rail can help financial institutions grow, while also improving the payment experience for every party involved.
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