FIDELITY NATIONAL INFORMATION SERVICES : FIS Study Shows Significant Revenue Opportunity for Large and Mid-tier Financial Institutions from Real-time Payments Offerings
05/14/2013| 08:05am US/Eastern
Real-time payments allow banks to achieve the transaction speed
consumers demand while providing significant financial return for the
Study shows a $1.1 billion revenue opportunity for U.S. banks that use
real-time payments to support the outbound foreign money transfer
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.
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
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 laptops.
"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.
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 solutions.
(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 www.fisglobal.com.
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Kim Snider, 904.438.6278
FIS Global Marketing
Senior Vice President
© Business Wire 2013