FIS Study Shows Significant Revenue Opportunity for Large and Mid-tier
Financial Institutions from Real-time Payments Offerings
*Real-time payments allow banks to achieve the transaction speed consumers
demand while providing significant financial return for the institution.
*Study shows a $1.1 billion revenue opportunity for U.S. banks that use
real-time payments to support the outbound foreign money transfer segment.
*The majority of consumers view their primary financial institution as the
first choice for real-time payment services, and many consumers are
willing to pay for these services.
JACKSONVILLE, Fla. -- May 14, 2013
Offering real-time payments can help consumers better manage their financial
lives, offer a differentiated banking experience and provide additional
revenue streams for financial institutions, according to the second phase of a
comprehensive research study released today by FIS™ (NYSE:FIS), the world’s
largest provider of banking and payments technology. Among other findings, the
study reveals that the most positive responses to real-time payments are among
people that are most sensitive to payment timing, such as outbound foreign
money transfer users.
The study, conducted by global market research provider Ipsos Vantis, on
behalf of FIS, gauged consumer sentiments and potential economic value for
banks that instantly authorize and settle transactions in four key market
groups: outbound foreign money transfer users, account-to-account (A2A)
transfer users, person-to-person (P2P) payment users and online bill payers.
The study sought to better understand the challenges consumers face with
payments and how institutions can derive bottom-line benefits by providing
real-time payments capabilities to their consumer and corporate customers. It
also found that consumers seeking real-time payments services can afford and
are willing to pay for fees associated with the services.
Overall, the study underscored that real-time payments resonate with consumers
and that the immediate availability of funds is very important, both from a
sender and a receiver perspective. To that end, 80 percent of overseas money
transfer users believe it’s important for their recipients to be able to use
the money they send to them immediately. Also, 58 percent of A2A users and 41
percent of P2P recipients want to have immediate access to their funds.
Other key findings include:
*The opportunity is now: Given that financial institutions are the
preferred place for customers to initiate real-time payments, even more so
than alternative payments or credit card providers, there is a sense of
urgency to seize the real-time opportunity now. In fact, the greatest
opportunity in real-time payments – especially for large and mid-tier
banks – is among the outbound foreign money transfer segment. While the
segment offers significant “white space” opportunity and potential for
generating more than $1.1 billion in new fee-based revenues for large
financial institutions (LFIs).
*Strong adoption potential: Consumers reported they would use real-time
payments – if available through online banking or their mobile banking app
– for a significant percentage of their transactions. Online bill payers
who currently use expedited payments estimate, on average, they would use
real-time bill payment through their online banking or mobile banking app
to make real-time payments for 71 percent of their expedited bill payments
going forward. On average, users of overseas money transfers say they
would use real time for 47 percent of those transactions, while A2A users
project making 36 percent of their money transfers in real time and P2P
users expect to use real time for 25 percent of their P2P transactions.
Overall, a compelling opportunity exists for FIs to migrate these
transactions to real time.
*Real time as a relationship builder: Real time provides another vehicle
for financial institutions to solidify relationships with profitable
consumers. For example, the research found that consumers who actively use
outbound foreign money services are more than twice as likely to own a
money market account and have an automobile loan with their primary
checking account provider. Real-time payments can strengthen customer
loyalty, making the foreign money transfer process much more convenient,
while generating fee income.
*Reaching the mobile consumer: Four out of 10 survey respondents who use
outbound foreign money transfer and P2P services want to be able to access
real-time applications through their mobile phones. For P2P payments,
nearly as many Gen Y respondents – those 18 to 33 – prefer to use mobile
phones to make real-time payments as those who prefer computers and
“The findings of our research and survey are clear – real-time money movement
is resonating with the majority of consumers, and financial institutions have
a tremendous opportunity to capitalize on the white space that real-time
payments can provide,” said Anthony Jabbour, executive vice president, North
American Financial Institutions, FIS. “The research confirms that consumers
are willing to pay for these real-time services and that mobile technologies
will be a catalyst for adoption in this space. Helping financial institutions
seize this opportunity is a key element of FIS’ broader payment vision.”
The second of a three-part series, the study’s findings are being unveiled on
May 14 at FIS Client Conference 2013, FIS’ annual conference for large and
mid-tier financial institutions. The first phase of the study, highlighting
findings that create opportunities for community institutions, was unveiled
last month at InfoShare 2013, FIS’ annual gathering of community banking
clients. The final phase will be released in the summer and will disclose more
detailed findings about consumer behaviors and payment preferences in the
retail payments channel.
The study’s research method was comprised of qualitative research with focus
group respondents, including overseas money transfer users, followed by a
national quantitative survey with 1,508 adult financial decision makers who
conduct their banking online or through mobile apps and interviews with 30
executives in the banking industry.
Real-time payments are a key pillar of FIS’ broader global payments vision.
FIS is in the process of piloting PayNet®, the company’s real-time
authorization and settlement solution powered by the NYCE® network. PayNet is
currently being integrated into FIS’ broad payments portfolio, including bill
pay, EFT, retail solutions, electronic commerce, P2P and mobile payments
FIS (NYSE: FIS) is the world’s largest global provider dedicated to banking
and payments technologies. With a long history deeply rooted in the financial
services sector, FIS serves more than 14,000 institutions in over 100
countries. Headquartered in Jacksonville, Fla., FIS employs more than 35,000
people worldwide and holds leadership positions in payment processing and
banking solutions, providing software, services and outsourcing of the
technology that drives financial institutions. First in financial technology,
FIS tops the annual FinTech 100 list, is 425 on the Fortune 500 and is a
member of Standard & Poor’s 500^® Index. For more information about FIS, visit
Photos/Multimedia Gallery Available:
Kim Snider, 904.438.6278
FIS Global Marketing and Communications
Mary Waggoner, 904.438.6282
Senior Vice President
FIS Investor Relations
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