Instant Payments Use Cases

Wespay’s Instant Payments Brief is a series of short articles designed to help members understand the key concepts of the next generation of payment services.

As a follow-up to our last Instant Payments Insights article, “Who Are Your Potential Instant Payment Clients?” we want to do a deeper dive in the key use cases that businesses and consumers are expected to use Instant Payments for.

It is important to remember that Instant Payments (i.e., FedNow and RTP payments) are services and were not designed to serve particular use cases. As Instant Payment services mature, new use cases are sure to evolve. But here at the beginning of the U.S.’s Instant Payments journey, we provide the most anticipated use cases so that you can understand how your customers/members are likely to use them.

Government Disbursements and Receipts

Federal, State, and local governments are expected to be adopters of Instant Payments for disbursements such as Social Security and tax refunds. For FIs enabling receive Instant Payment capabilities in the first phase of their Instant Payments adoption strategy, having the capability to offer faster access to government disbursements could be an attractive feature for both businesses and consumer account holders to advertise.

Request for Payment (RFP)

RFP is one of the most compelling use cases for financial institutions that have Instant Payments send capability. It allows businesses to notify their customers of an upcoming bill via a non-dollar Instant Payment message. The customer is then able to approve and pay the bill via Instant Payment. The customer has the ability to modify the amount or date of the payment, or establish recurring payments going forward. The business can also receive notification of the customer’s intended payment date.

Business-to-Consumer (B2C) Payments

Not just for “gig workers” anymore, there is a growing trend of businesses utilizing “immediate payroll” that allows workers to get paid on a schedule of their choosing as a means of improving retention and job satisfaction. Consumers whose employer offers Instant Payments will be looking to open an account with an FI that can receive these payments, which also enables consumers to receive other types of Instant Payments disbursements such as purchase refunds, rebates, commissions, insurance payouts, loan disbursements and expense reimbursements.

Business-to-Business (B2B) Payments

The speed of Instant Payments can free up working capital by allowing businesses to pay suppliers upon receipt of goods or services, improving real- time money management and cash flow and enhance supplier/customer relationships.

Consumer-to-Business (C2B) Payments

C2B payments allow consumers to pay for on-demand services such as home repair, landscaping, etc. that today are made by check or non-FI based payment services (i.e., Venmo, CashApp, etc.). FIs can provide the same experience for consumers making routine or emergency payments, and businesses can enable Instant Payments for e-commerce (consumables or digital goods) or for increasingly popular services such as mobile order pickup or in-store delivery in addition to regular point-of-sale transactions.

We hope these top use cases help you envision how your customers/members will utilize the speed, convenience, and always-on nature of Instant Payments, which can help you market this new capability and help to calculate your organization’s ROI in Instant Payment capabilities.

For additional information or questions about Instant Payments Use Cases contact Wespay at [email protected]. To inquire on how Wespay Advisors can help your organization build its own Instant Payments strategy contact us at [email protected].