New players, new games

Most never expected that a service as ubiquitous as the taxi would be struggling against external competition. Now we know that ride-sharing apps and other unexpected competitors have appeared and compromised what was once a stable market. This story has played out across many industries, but payment services are of particular interest. Once upon a time, outside of handing over cash, the easiest legitimate way to share money would be via a financial institution. Now, options abound for consumers looking to transfer funds.

Services like Zelle, Venmo, and CashApp have become the de facto standard for low-to-middle value peer-to-peer (P2P) payments. Actions like splitting bills have been made easier by the development of these applications. Furthermore, they’re seeing increased use as payment solutions for commerce, sidling up against other newer players like Square. All of these services have two key factors in common, powering their rapid growth—accessibility and speed.

Catalyzing these changes are the exciting new payments rails gaining momentum in the U.S. The Clearing House’s RTP® Network is one example in use since 2017. We also have FedNow, releasing in 2023. For FIs willing to capitalize, this is an incredible opportunity to offer transformative services. If an institution’s faster payment options are able to match the accessibility of mobile payments, then they are a no-brainer for those using digital payments for the first time. For the consumers already using a fintech competitor’s service, moving money between their wallet and primary bank account becomes seamless, instant, and often free. Furthermore, if they’re able to instantly transfer money from their primary account directly to any of their peers, they may consider switching over entirely.


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