Instant Payments
With two instant payments networks now live and in the market, financial institutions are moving quickly to begin offering real-time payment capabilities to their customers. ICBA urges all community banks to develop and implement strategic plans to provide instant payments products and services to meet customer needs.
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Position & Background
ICBA supports the continued evolution of broadly inclusive, safe, highly secure, efficient, and instant payment systems that enable risk mitigation and help community banks remain competitive in meeting the payments needs of their customers. ICBA encourages its members to focus on adopting instant payments.
ICBA encourages instant payment networks to continue to focus on keeping fraud levels low and considering options for making networks interoperable. ICBA recognizes that core processors play a critical role in ensuring community bank readiness and encourages banks to work with their processors and technology partners to adopt instant payments. ICBA encourages the cores to ease entry for community banks through accommodating pricing and supportive project management.
ICBA encourages the U.S. Treasury Department to utilize instant payment methods to deliver government payments to citizens’ bank accounts. This would reduce the number of checks in the mail and could contribute to reducing check fraud.
ICBA urges policymakers to continue to assess and review the impact of instant payments on the current legal and regulatory framework.
In 2023, the FedNow Service launched and the RTP network hit its five-year anniversary. With two instant payments networks now live and in the market, financial institutions are moving quickly to begin offering real-time payment capabilities to their customers. ICBA urges all community banks to develop and implement strategic plans to provide instant payments products and services to meet customer needs.
The implementation and ubiquitous adoption of instant payment systems will strengthen the US economy by providing a platform for continued innovation and economic growth. ICBA recognizes that instant payments can play a vital role in sustaining economic growth and ensuring that American businesses and consumers can access payments products and services that meet the needs of the 21st century economy. In addition, increased adoption of instant payments could help to reduce check fraud.
The attributes of real-time payments potentially impact consumer protection and risk mitigation strategies. Many of the protections included in the existing legal and regulatory framework need to be revisited to accommodate new payments settlement networks such as FedNow, RTP, or card-based solutions.
ICBA encourages the federal government to continue to utilize instant payment methods to reduce inefficiencies associated with issuing checks and promote the benefits of electronic payments and bank accounts. Policymakers should support community banks as they prioritize instant payments by eliminating undue regulatory burdens that may impede adoption.
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