There is some truth to the industry's perception that "faster payment equals faster fraud" – given that many fraud prevention controls rely on payment process time lags, and the instant payments process eliminates those time lags, it can quickly expose gaps in existing fraud controls, according to SRM. But The Clearing House and Federal Reserve have reported that current fraud rates on RTP and FedNow transactions are below the levels they are experiencing for other payment instruments, such as ACH, wires and checks. What's more, fraudsters are more likely to focus on areas that offer a high ROI, meaning they tend to favor payment rails that process higher volumes and are therefore more mature than instant payments rails, the report noted.

Concerning those institutions that are waiting for more evidence of market demand to implement instant payments, SRM asserted that their "fast follower" approach can lead to competitive disadvantages. For example, it pointed out that some employers are providing employees with lists of financial institutions that allow them to take advantage of the employer's earned wage access or early direct deposit offerings – both instant payments use cases – leading employees to switch institutions should theirs not be on the list. And news that the U.S. Treasury plans to use FedNow to disperse various government payments makes instant payments adoption more urgent: "No FI wants to be in the position of customers receiving a message that the rapid availability of funds does not apply to them because they do not bank with a participating institution," the report said.

Other reasons for instant payments adoption hesitancy, according to the July Market Pulse survey respondents, include a lack of support and core system limitations, with one respondent stating, "Our biggest hurdle is 24/7/365 support – especially for the send aspect," and another commenting, "We will be live as soon as our core allows us."

The report did note that several changes are being made to the two rails based on participant feedback – the RTP Network has incorporated more market-facing professionals into its management team, while the FedNow Service is rolling out two new risk management features as well as an API-based data exchange in 2025.

A lack of clear, worthwhile use cases is another hurdle to adoption, with one survey respondent stating, "Receive only is a no-brainer, but use cases for a FI of our size aren't as clear. Our goal is to get to send with a simple use case to make sure it works and that we can process successfully."

Echoing that particular respondent's point, the report said that while SRM views "receive only mode as a no-regrets move to limit the competitive downside for financial institutions," receive "is only a first step as a growing number of banks (mostly larger ones) actively promote send capabilities to business and consumer customers. FIs unable to match these services will find themselves at a competitive disadvantage."

According to SRM, the benefits to financial institutions of enabling both send and receive modes include the generation of fee income, driving customer/member acquisition/retention, and the ability to upgrade existing products such as loan disbursements. In addition, it can help drive internal operational efficiencies.

"Instant payment systems often provide detailed transaction data, simplifying reconciliation and reducing error rates," the report stated. "Banks and credit unions can manage liquidity more efficiently by enabling real-time fund transfers. Real-time processing and the associated automation lessen the need for manual intervention, lowering labor costs compared to traditional payment methods."