The Faster Payments Frontier: Speed, Security, and the Power of Collaboration

Anthony Peculic, Head of Cards & BaaS, Cross River

June 28, 2024

4 min read

In the fast-paced world of digital finance, where transactions happen in the blink of an eye, “faster payments” is now more than just a buzzword. It's a movement that’s transforming how we interact with money, demanding that financial institutions adapt, or risk being left behind. At i2c’s recent webinar, I had the privilege of discussing this very topic with fellow industry experts, delving into the implications of new payment technologies for financial institutions. Our discussion unearthed some key insights, shedding light on what faster payments mean for the future of financial institutions. 


The rise of faster payments: a paradigm shift of expectations

Faster payments are not merely a technological upgrade; they represent a fundamental shift in consumer and business expectations. I like to call faster payments the new currency of customer satisfaction in the digital age. The days of waiting for checks to clear or ACH transfers to process are fading against today's digital-savvy individuals and businesses demand swift, seamless transactions that align with their fast-paced lives. 

At Cross River, we are pioneering faster payments having recognized early on that this technology is not just about speed but about enhancing the overall customer experience.

Use cases beyond P2P: expanding the faster payments landscape

While peer-to-peer (P2P) payments have been the poster child for faster transactions, the market is rapidly expanding to encompass a broader range of use cases. Business-to-consumer (B2C) applications, such as bill payments, insurance disbursements, and on-demand invoice payments, are gaining momentum. Platforms like FedNow® and RTP® are driving this expansion by offering greater accessibility and addressing the specific needs of businesses and consumers alike. 

This diversification of use cases highlights the versatility of faster payments and their potential to disrupt various sectors of the economy. It's no longer about convenience alone; it's about solving real-world problems and improving financial efficiency. 


Universal acceptance: the key to mass adoption

The success of faster payments is universal acceptance, and two factors will play a critical role. Firstly, the market is gravitating towards solutions that are open and inclusive, welcoming participation from all financial institutions, regardless of their size or affiliation. This is where platforms like FedNow® and RTP® have a distinct advantage as they are more universally accepting over closed networks like Zelle, essentially owned by some larger banks.

Secondly, the "Big Brother” effect is an apprehension smaller banks feel about sharing their data with larger institutions that may have competing interests or platform. Larger entities could use shared data to gain an unfair advantage, to enhance their offerings at the expense of smaller banks. The presence of neutral entities, such as the Federal Reserve, can help alleviate these concerns by acting as a trusted intermediary, ensuring data is used fairly and securely, and fostering a level playing field for all participants. 

Faster payments [technology] is the new currency of customer satisfaction in the digital age.


Anthony Peculic

Head of Cards & BaaS

Cross River

The fraud challenge: balancing speed and security

As with any technological advancement, faster payments come with their own set of challenges, most notably the increased risk of fraud. While AI can play an important role in detecting and preventing fraudulent activities, it is not a foolproof solution. Human oversight remains essential to ensure the security and integrity of the system. 

At Cross River, we emphasize the importance of collaboration among industry stakeholders to address this issue. Sharing best practices and working together to develop robust fraud prevention strategies are paramount to maintaining consumer trust in the faster payments ecosystem. A collaborative approach can create a more secure environment where innovation can thrive.


Mobile-first: the future of financial transactions 

Mobile is the primary interface for financial transactions. Smartphones have become extensions of ourselves, and consumers expect to manage their finances seamlessly on their mobile devices. This has led to the rise of mobile wallets, which have become a standard feature for consumer and small business payment solutions that offer convenience, security, and a seamless user experience. 

Embracing mobile technology is not a trend anymore; it's a necessity to stay competitive and meet the evolving needs of consumers. The importance of a mobile-first development approach for any fintech company operating in the payments space will be crucial in the era of speed. 


Adapting and thriving in the era of instant gratification 

The industry needs to work together to establish standards, share best practices, and ensure that faster payments benefit everyone while maintaining security and trust. As technology continues to evolve, adaptability and a proactive approach will be key to success in this exciting new era of financial services.