The global payments landscape is undergoing a significant transformation with the advent of faster payment systems. In the United States, initiatives like Visa Direct and the Federal Reserve's FedNow Service are leading this change, while Canada's upcoming Real-Time Rail (RTR) system is set to complement existing payment infrastructures. These developments are set to transform the way customers make payments, enabling faster, more convenient, and seamless transactions while also introducing new expectations for speed and accessibility.

Visa Direct's Acceleration of Instant Payments

Visa, a global leader in digital payments, has announced a significant enhancement to its Visa Direct service. Starting in April 2025, funds transferred to U.S. bank accounts via Visa Direct will be available within one minute or less. This enhancement aims to meet the growing demand for real-time financial transactions, benefiting consumers, businesses, and governments alike. The service facilitates various transactions, from splitting bills to receiving insurance payouts, ensuring immediate fund availability. (usa.visa.com)

FedNow: The Federal Reserve's Real-Time Payment Solution

The Federal Reserve's FedNow Service, launched on July 20, 2023, represents a pivotal shift toward real-time payments in the U.S. Operating 24/7/365, FedNow allows financial institutions to offer instant payment services, enabling individuals and businesses to send and receive money within seconds. By 2025, over a thousand financial institutions have adopted the service, reflecting its growing acceptance and the increasing demand for faster payment solutions. (en.wikipedia.org)

Canada's Real-Time Rail (RTR) Initiative

Canada is also advancing its payment systems with the upcoming launch of the Real-Time Rail (RTR). Set to go live in 2025, RTR aims to provide instant payment capabilities nationwide, enhancing the efficiency of financial transactions for both consumers and businesses. This initiative reflects a global trend toward real-time payment infrastructures, positioning Canada alongside other nations embracing faster payment solutions.

Key Lessons from Instant Payment Adoption in Other Markets

The UK’s Faster Payments Service (FPS), launched in 2008, and the EU’s SEPA Instant Credit Transfer (SCT Inst), introduced in 2017, provide valuable insights for financial institutions preparing for real-time payments.

• Customer Expectations Have Shifted: Instant payments have set a new standard for speed and convenience, pushing banks to enhance user experiences. Customers now expect immediate availability of funds in their accounts.
  • The European Central Bank (ECB) 2022 "Study on the payment attitudes of consumers in the euro area" reported that consumers are increasingly opting for instant payment solutions, reflecting a desire for immediate fund availability. ​
• Fraud Risks Require Proactive Measures: Faster transactions increase fraud risks, leading to stronger authentication and fraud prevention strategies.
  • European Banking Authority (EBA) Observations: The EBA's 2024 assessment of 2022 fraud data revealed that instant payments exhibit notably higher fraud rates compared to traditional credit transfers, highlighting the need for enhanced fraud prevention measures.
• 24/7 Operations Demand Infrastructure Investment: Real-time payments require continuous availability, necessitating robust IT systems and operational adjustments to ensure uninterrupted service.
  • Mastercard's Economic Impact Study indicates that instant payment systems require substantial infrastructure enhancements to support real-time or near-real-time operations.
  • Mercator Advisory Group Report emphasizes that real-time payments are a key motivator for financial institutions to modernize their infrastructure, with executives anticipating an average timeline of 4.1 years to achieve such modernization.
• Evolution of the Competitive Landscape: FinTech companies have leveraged real-time payments to introduce innovative solutions, pushing traditional banks and financial institutions to adapt or risk losing market share.
  • McKinsey & Company Report indicates that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2023 and 2028. This rapid growth underscores the pressure on traditional banks to innovate and adapt to the evolving financial landscape.

These lessons highlight the strategic considerations financial institutions must address as real-time payments become the global norm.​

How HPS can assist   

At HPS, we recognize that instant payments are transforming the financial landscape, requiring banks and financial institutions to rethink their payments infrastructure. As real-time payments become a new standard, financial institutions must consolidate multiple payment rails (including cards, accounts, and instant transfers) on a unified platform to maintain visibility, security, and efficiency.

With PowerCARD, HPS’ Digital Payment Platform, we provide a comprehensive payment hub that enables banks to:

• Centralize Payment Processing: whether a transaction is made via card or instant payment, banks can consolidate all payment flows onto a single platform, gaining a real-time, 360-degree view of transactions. This enhances fraud detection, compliance, and operational efficiency.
• Implement Risk Controls for Instant Payments: just as banks set spending limits on card payments, PowerCARD allows them to apply tailored limits and rules to instant payments, helping to mitigate fraud risks and unauthorized transactions.
• Expand Instant Payment Offerings: beyond processing, banks can leverage instant payments to introduce digital wallets, loyalty programs, and value-added services such as insurance or assistance, mirroring what they already offer on cards but now extended to real-time transactions.
• Enhance Acquiring Capabilities: for merchants, PowerCARD simplifies payment consolidation, providing a unified view across all payment channels (cards, instant payments, and account-based transactions).

With PowerCARD, banks can seamlessly integrate instant payments while ensuring security, compliance, and innovation. Ready to take the next step in real-time payments? Contact us at sales@hps-worldwide.com.