Faster Payments will drive consumers to switch bank accounts

  • Payments
  • 20.07.2015 01:00 am

The appetite for faster, easier and more convenient payment methods among UK consumers is rising rapidly, according to a new YouGov and ACI Worldwide (NASDAQ: ACIW) online survey of more than 2,000 UK adults. 45 percent of UK current account holders say the offer of faster electronic payments would encourage them to switch their bank account provider, the research shows.

The findings reveal that UK consumers have high expectations when it comes to speed of electronic transfers.

·        41 percent of respondents say they would expect electronic payments to reach the recipient’s account immediately or in less than 5 minutes.

·        65 percent of UK bank account holders would like to see immediate payments for utility bills, 60 percent for credit card bills, and 66 percent for payments to family and friends.

·        47 percent agree that a benefit of faster electronic payments is the opportunity to carry less cash.

Payment delays are also one of the biggest irritations for consumers, according to 33 percent of respondents with a bank account. The only bigger irritations are fees for cash withdrawals from ATMs (55%) and fees for debit and credit card transactions (52%).

As might be expected, the younger generation of account holders (18 to 34) are the fastest adopters of newer banking services like mobile banking and contactless.

·        54 percent of 25–34 year olds use mobile banking at least once a month; 44 percent in that age group use contactless payments in an average month. They also find it more appealing to switch current accounts for the offer of faster electronic payments (61% of 25-34 year olds may make that switch compared to only 35% of 55 and over).

Barry Kislingbury, Lead Solutions Consultant, Consumer Banking Europe at ACI Worldwide, comments:

“Our research shows that today’s consumers want fast and easy payment methods. Speed is very important to them as is convenience. Many of our big retail banks are missing a trick. Today’s consumers, especially young ones, are financially and digitally savvy. Banks have a real opportunity to stand out by offering faster payments and other innovations that today’s consumers covet.” 

The UK is one of the leading countries when it comes to faster payments adoption.  Currently, 10 banks are participating in the UK Faster Payment scheme with efforts by the new UK Payment Systems regulator underway to open up the system to more participants including challenger banks and other financial services providers. Under the Faster Payments scheme, a direct payment between two current account holders takes just 15 seconds to transfer.

However, consumers have very different views as to how fast they can expect payments to be transferred into a recipient’s account.

·        23 percent of respondents say they would expect an electronic transfer to reach recipients immediately while another 23 percent say up to three hours.

·        8 percent of respondents would expect electronic payments to take between two to three days.

Kislingbury adds, “This clearly shows there is a need for greater transparency regarding the service levels being offered by banks, so that consumers can make informed decisions and select the right current accounts and banking providers to meet their needs. Banks that offer electronic payments in seconds or minutes would seem to have an important differentiator that they are not fully exploiting today.”

ACI’s UP Framework for Immediate Payments provides an infrastructure that allows agility to respond more quickly to new business initiatives and customer demands. It offers the ability to renovate payments applications while still using the best of an organization's current infrastructure.

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