Businesses are actively using instant payments. Nearly two-thirds of U.S. businesses (66%) are likely to use instant payments if offered by their primary financial institution, according to a Federal Reserve Financial Services (FRFS) survey (Off-site). And those that use instant payments reported 10% greater satisfaction with their primary financial institution than businesses that do not.

Businesses identified several priority use cases that would benefit from instant payments. Key findings include:

• Nearly four in 10 businesses (38%) want instant digital wallet funding and defunding
• Over one-third (34%) expressed an appetite for paying recurring bills and invoices instantly
• Businesses are increasing their prioritization of “just-in-time” business-to-business (B2B) payments (29%) and urgent same-day transactions for customers (29%)
• Interest in request for payment grew eight percentage points to 22% this year, as embedded finance offerings, which integrate financial services like payment functionality into nonfinancial platforms, become more common
• Seventeen percent of businesses showed strong interest in large-value business-to-person disbursements, such as insurance payouts, legal settlements, and lending funds, while 11% prioritize small-value disbursements, including refunds and rebates 

These offerings can open the door to an emerging array of transaction types down the line, including title payments, car payments, insurance disbursements and online marketplace payouts, enabling businesses to effectively manage cash flow and better meet customer needs. 

Payroll continues to drive growth across business sizes

Instant payroll continues to see high demand, with 35% of businesses of all sizes citing it as a top use case. Providing an instant payments “payday” could help employers pay their employees with greater speed and flexibility — advantages that can improve cash flow management for employers while strengthening employee relationships through added benefits.

Of those surveyed, 3% of businesses currently use instant payroll, but there’s considerable growth potential: 72% of “very large” businesses and 44% of “very small” businesses want instant payroll capabilities for their organization.

Pain points can be tackled by instant payments

Businesses surveyed cited high costs (48%), security issues (32%) and a lack of timeliness (32%) as top challenges across all payment types. But they believe instant payments can provide solutions:

• Over half of businesses surveyed (56%) selected lower costs as a top benefit/motivator of adoption. These savings could manifest by offsetting other fees and reducing manual processing.
• Timeliness is also becoming more attractive, with businesses citing greater flexibility (41%), 24/7 year-round service (37%) and instantly available funds (36%) as core motivators.

Instant payments’ ability to resolve pain points can combine with other benefits, including faster settlement, data-rich messaging and risk mitigation tools, to tighten relationships between businesses and their financial institutions. 

A faster future

Ninety-two percent of businesses use some form of faster payments, including instant payments, Same Day ACH and digital wallets. Though legacy payment methods aren’t disappearing entirely, faster methods are critical to satisfy customer demands related to efficiency, settlement speeds and safety, with 34% of respondents citing payment choice as key to business success.

In turn, businesses are embracing digital methods as they center payment choice:

• Businesses are promoting faster payments: 52% of businesses encouraged credit card use and 47% encouraged ACH
• An uptick in demand for faster payments could come at the expense of some legacy payment volume, with 19% of businesses discouraging use of checks and 24% discouraging cash, though these payment methods are often leveraged as alternatives when faster, electronic payments are not practical 

Increasing prioritization of fast and digital payments likely will drive uptake of instant solutions: 76% of nonadopters indicated that consumers and trade partners asking for instant payments would be key to them using the service.

Learn more 

To get more details on the key benefits driving faster and instant payment adoption and to understand other trends in the business payment space, read the full business survey results (PDF, Off-site).

This survey was conducted by Federal Reserve Financial Services. FRFS provides payment services and seeks to foster the stability, integrity and efficiency of the nation’s monetary, financial and payment systems. It offers a comprehensive suite of payment and information services to financial institutions. FRFS provides an instant payment service to financial institutions known as the FedNow® Service, and thus the survey, and the statements and findings contained in this summary, are not independent academic research.

For more information about instant payments and the FedNow Service, visit FedNow Explorer (Off-site).