One year on, FedNow and instant payments are seeing a groundswell of interest and intention to speed up funds paid out to individuals. Taking stock of the July 2023 launch of the central bank’s instant payment rail, Jill Capicchioni, product director of payments at NCR Voyix, said a use case that has emerged in “overwhelming” fashion across FedNow and The Clearing House’s RTP network is earned wage access (EWA).
“I don’t think that we, or anyone else, really anticipated that as a primary use case,” she told PYMNTS during the “What’s Now in Payments” series discussing the first anniversary of the FedNow® Service. Conventional wisdom held that instant payments and FedNow would be used as a replacement of traditional ACH and wire transactions.
Despite the fact that those transactions impact consumers, “I don’t think the consumers are really aware, especially with earned wage access, that what’s driving that technology is the FedNow network.” Instead, she said, consumers are focused on the financial institution (FI) that can support and offer instant payments capabilities. EWA may not be the killer use case, she said, but it can and likely will boost awareness of instant payouts. Larger firms have already seen the benefits of instant payments, avoiding some of the fees tied to push-to-card transactions.
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