Skip to main content

Impact of the RTP® network and the FedNow® service on card fees

In a recent webinar, Payments in 2024: What You Need to Know, featuring insights from Erika Baumann, Director of Commercial Banking & Payments Practice at Datos Insights, and Mark Majeske, Senior Vice President of Faster Payments at Alacriti. The discussion provided a comprehensive overview of the anticipated trends and innovations set to shape the payments sector in 2024. Read on to discover the answers to financial institution decision-makers’ questions during the webinar.

Impact of the RTP® network and the FedNow® service on card fees

What impact do we see on card fees, given the adoption of RTP and FedNow?

Baumann noted, “It’s too soon to see a significant impact on card fees due to RTP and FedNow. Financial institutions are concerned about the potential cannibalization of card, ACH, and wire volumes. However, the current volumes haven’t significantly affected these fees.” She emphasized the importance of viewing the total relationship value with businesses, including their card business, deposits, and transactions.

Mark Majeske added, “We haven’t observed any notable effects on card fees yet. As adoption and volume increase over the next few years, we may see some impact.”

Monetizing instant payments

How are financial institutions monetizing instant payments? What are you seeing as the different pricing models?

Majeske shared his perspective. “Monetization is crucial. Instant payments offer value due to their speed and 24/7 availability, justifying a fee. Some institutions charge for instant payments, recognizing it as a premium service. It’s important to charge market rates rather than compensating for lost revenue from other products.”

Baumann agreed but offered a word of caution: “While monetizing instant payments is important, it’s crucial to balance fees to maintain competitiveness and not deter usage. Financial institutions with strategic pricing and rollout plans see higher adoption rates.”

Baumann also shared what she’s been hearing from financial institutions. “I have some FIs that say I’m getting $15 per wire or $20 per wire; I need to make up for that and charge more for faster payments. When I ask businesses why they are not using real-time payments at their institution, I get a list of reasons, but one of them I’ve noticed at financial institutions that do not have as strategic of a rollout with their pricing and their total stickiness of how they’re going to maintain their portfolio and their market share.”

Choosing between FedNow and RTP

Which rail are people starting with first—FedNow or The Clearing House—and what are some considerations with that decision?

“Institutions are choosing both FedNow and RTP due to their similar features. Implementing both simultaneously is cost-effective and operationally efficient. It’s about addressing customer needs and solving problems effectively,” Majeske observed. “When you look at the integration effort, like if you are a customer of ours, if you’re going to bother to implement something, why not do both at the same time? The incremental cost of doing so is very, very small.”

Baumann elaborated, “The majority of the volume is still running through the RTP network, but institutions are adopting the FedNow Service as well. Each rail has its challenges, but offering both ensures comprehensive coverage.”

Request for payment and fraud solutions

How does Request for Payment work for Receive-only FIs?

“Request for Payment (RfP) is still developing. It requires Send capability, making it less suitable for Receive-only institutions at this stage,” Majeske remarked.

Baumann also weighed in. “You have to have the message types enabled so that the businesses can send that Request for Payment, get information back, and exchange those messages back and forth. I do agree that we’re not at an inflection point in the market yet, but there’s an opportunity there. I’m having a lot of FIs and the non-FIs talking to me about next-generation bill pay and what RfP means in optimizing this. So while we might not see the maturation for another 12 months or so, what we will see is financial institutions taking advantage of the earlier adopter advantage.”

The topic of fraud prevention in real-time payments also came up. “We are developing real-time fraud solutions, recognizing the importance of integrated fraud prevention in instant payments,” said Majeske.

Addressing ACH cannibalism

What amount of cannibalism are you seeing from ACH?

Baumann reframed the issue. “Rather than cannibalism, we see strategic shifts in payment volumes. ACH growth is slowing but not declining. New economy markets favor more efficient payment methods like RTP and FedNow. If an FI is seeing some of their volume shift, that means that your clients are optimizing their end-to-end payment strategy. And that’s actually a good thing. We have not seen a decrease in ACH volumes, but we have seen a slowing growth trajectory when we go out to businesses and say, what have you used? Then I ask them, what is your projected growth rate for each one of these methods that you’ve used in the last 12 months and the continuing 12 months? ACH is much lower. It’s actually the lowest on the growth curve of the anticipated aggressive growth.”

Majeske added, “It’s a natural shift based on customer need. Instant payments provide 24/7 capability, which ACH and wire transfers can’t offer.”

Instant payments for B2B and B2C

What is the breakdown for instant payments of B2B versus B2C? For B2B, what type of relationship or contract is expected before moving a vendor to instant payments?

“The use cases, just like any other technology we see, really start in the consumer realm and leak up to the business side. So, the expectations for faster payments in the business world started on the P2P side. It started with the Venmos and the Cash Apps answered then by Zelle from the financial institutions, which then obviously Zelle small business, which used to not be actually real-time. Now it is, but it was a handshake between banks. It’s the financial institution’s way of inserting themselves in combating some of the lost deposits into those digital wallets. It then moves upstream, so it’s less about the percentage and more about how is that mentality and that shift changing. If you have payment terms with, or if a business has payment terms with, an established business partner, they probably (unless those terms need to be revised) don’t need to re-look at that.

Where it becomes important is I’m working on efficiencies, I’m working on strengthening my relationships, and I wanna make the most of my liquidity. So I don’t want to pay two days from now and see when that clears or pay yesterday. I want to pay at the exact moment that this other important impending payment has come in. So the B2B marketplace is taking lessons from the B2C and the P2P marketplace and utilizing faster payments as it makes sense to have more efficient data, better market relationships, not necessarily to displace processes that are already working really well,” explained Baumann.

Healthcare industry adoption of payment technology

Do you view the healthcare industry as a slow adopter of payment technology?

“Healthcare payments tend to lag, presenting significant market opportunities. Engaging with healthcare companies early can lead to strategic advantages,” noted Baumann.

Mark Majeske agreed, adding, “Healthcare is growing rapidly in other technologies, and we expect payments to become more integrated into their daily operations, presenting substantial opportunities.”

 

For more insights on payments trends in 2024, watch the full webinar, Payments in 2024: What You Need to Know, featuring Alacriti and Datos Insights.

Alacriti’s centralized payment platform, Orbipay Payments Hub, provides innovation opportunities and the ability to make smart routing decisions at the credit union to meet their individual needs. Credit unions can take full ownership of their payments and control their evolution with ACH, Wire, TCH’s RTP® network, Visa Direct, and the FedNow® Service, all on one cloud-based platform. To speak with an Alacriti payments expert, please contact us at (908) 791-2916 or info@alacriti.com.

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Why First Responder Credit Unions Are Built to Adopt Blockchain Faster

  For years, blockchain in financial services lived mostly in the world of experimentation—proofs of concept, pilot programs, and innovation labs that rarely touched day-to-day operations. That era is ending. Today, blockchain adoption is moving from experimentation to scale. Across payments, capital markets, and banking infrastructure, financial institutions are beginning to operate on new rails—powered by tokenized money, programmable assets, and always-on settlement models. For credit unions serving first responders, this shift presents not just a technology opportunity, but a strategic one. Blockchain Is Becoming Core Infrastructure The most important change isn’t the technology itself—it’s how it’s being used. Blockchain is no longer about testing what might work. It’s increasingly being deployed as infrastructure to solve long-standing problems in financial services, including slow settlement, trapped liquidity, manual reconciliation, and limited operating hours. Cr...
Post a Comment
Read Complete Article HERE>»

Health Coverage Tailored for You! Allstate Health Solutions

Health Coverage Tailored for You!  Allstate Health Solutions At the National Council of Firefighter Credit Unions ( NCOFCU), we can help credit unions and their members find health coverage that supports their lifestyle and budget . Through our partnership with Allstate Health Solutions , you get access to flexible health plan options — including short-term medical, supplemental coverage, dental, and more — designed to fill gaps and bring peace of mind when life shifts or coverage matters most. Why choose Allstate Health Solutions?   https://ncofcu.allstatehealth.com/ Flexible health plan options — Explore short-term medical, supplemental accident, critical illness, and dental coverage that fits your needs and budget. Coverage made simple — Find and compare plans quickly with our easy online experience. Support for transitions — Ideal for periods between job-based coverage, changes in life circumstances, or when you want supplement...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - Budweiser 101

Draft Horses   Budweiser 101 Perhaps best known for its Super Bowl Clydesdale ads, Budweiser   is among the world’s most popular beer brands. It was among the first beers to achieve national distribution in the late 19th century, thanks to its revolutionary refrigeration and pasteurization techniques, setting the stage for the modern US beer industry.   Founded in the 1850s as the “Bavarian Brewery,” the company was acquired in 1860 by Eberhard Anheuser. He sold half of it to his son-in-law,  Adolphus Busch ,   in 1869, forming the partnership that would become Anheuser-Busch in St. Louis, Missouri.   In the 1870s, Carl Conrad , a St. Louis distributor, traveled through a Bohemian town called “Budweis” in German and drank a pale lager. Upon returning home, he worked with Anheuser-Busch to brew its own light lager, marketing it under the ...
Post a Comment
Read Complete Article HERE>»

Letter to Credit Unions (24-CU-03) Consumer Harm Stemming from Certain Overdraft and Non-Sufficient Funds Fee Practice

      Letter to Credit Unions (24-CU-03) Consumer Harm Stemming from Certain Overdraft and Non-Sufficient Funds Fee Practices Dear Boards of Directors and Chief Executive Officers: If your credit union assesses overdraft or non-sufficient funds (NSF) fees that your members cannot reasonably anticipate or avoid, your credit union may be exposing itself to heightened reputational, consumer compliance,...
Post a Comment
Read Complete Article HERE>»

The NCOFCU Podcast: Clear Insight. No Jargon.

Every week, we cover the latest trends and developments within the credit union industry. At NCOFCU, we are dedicated to providing you with insightful discussions that cut through the clutter. Our podcast features expert opinions, in-depth analyses, and an exploration of the challenges and opportunities that credit unions, directors, and staff face today. Join us as we navigate the evolving industry and empower associations with the knowledge they need to thrive. https://ceohp.podbean.com/ ================================================= Remember, you're not alone with  NCOFCU.org Join/Upgrade Check out some of NCOFCU's additional features: First Responder Credit Union Academy Financial Literacy Podcasts YouTube Mini's Blog Job Board
Post a Comment
Read Complete Article HERE>»

Harper Issues Letter to CU Execs Outlining NCUA’s Approach to Overdraft, NSF Fees - Henry Meier, Esq

Legal and compliance expert,  Henry Meier, Esq,  says this is an “unequivocal warning” to credit unions to address the issue sooner than later. The issue of overdraft and non-sufficient funds (NSF) fees has gone from a business practice that was seen as simply part of the credit union business plan, to a topic fraught with political and social ramifications. Much of the fee debate began earlier this year when the CFPB issued a proposed rule to clamp down on banks and credit unions issuing what  Director Rohit Chopra called “junk fees.”  From there, the overdraft and NSF issue became worrisome for many credit union leaders who have or continue to have some kind of reliance on the fee income. On Tuesday, NCUA Chairman Todd Harper  posted the guidance letter  on the agency’s website that gave credit unions a very clear picture of the NCUA’s stance on its approach to overdraft and NSF fees – these fees may be a significant legal, consumer compliance, third-part...
Post a Comment
Read Complete Article HERE>»

NCUA: More than $1.3 Million will be Available; Applications Due by May 22

ALEXANDRIA, Va. (April 13, 2020) – Recognizing the immediate needs of credit unions and their members in the COVID-19 pandemic, the National Credit Union Administration is committing the majority of the 2020 Community Development Revolving Loan Fund appropriation for COVID-19 assistance. “The NCUA recognizes that federally insured credit unions will face unpredictable challenges and costs as a result of the COVID-19 pandemic,” NCUA Chairman Rodney E. Hood said. “The increase in available grant funding will help more low-income credit unions to continue offering quality and affordable financial services to their members and communities. I encourage all eligible credit unions in need to consider applying for these grants as a means to ensure service to their members.” The agency is committing $1,375,000 for grants to eligible low-income credit unions, an increase of $575,000 from the $800,000 originally announced on March 31. This funding will supplant the traditional Community Developm...
Post a Comment
Read Complete Article HERE>»

Chairman Hauptman’s Remarks for FLEC Public Meeting (Trump Accounts)

  As Prepared for Delivery on February 6, 2026 Meeting Focus: Implementation and Outreach for Trump Accounts Good morning and thank you to our colleagues at the U.S. Department of the Treasury and members of the Financial Literacy and Education Commission for convening today’s important discussion. I also want to express my appreciation for this body’s leadership in encouraging savings and advancing the broader goal we all share—ensuring that every American has a meaningful opportunity to build financial capability, resilience, and long-term financial security. There’s a lot to like about Trump Accounts, including how easy it is to start the process when filing your taxes. These accounts were clearly designed with behavioral economics in mind. That is to say, things that are easier to do are more likely to get done. Trump accounts also turn all these kids into investors. The more Americans that identify as investors, the better off we are. Investing done by regular people turns Mar...
Post a Comment
Read Complete Article HERE>»

What Does PTSD in a Firefighter Look Like? A New Brain Scan Can Show You

Link Post-traumatic stress disorder (PTSD) is often described as one of the invisible scars that firefighters and others accumulate after years of dealing with trauma in their jobs. Now the scars are invisible no longer. A new tool—the SPECT scan—is offering a new way for firefighters and others with PTSD to visualize their injuries. SPECT stands for single photon emission computed tomography, and it creates 3-D scans of the patient’s brain that look at blood flow and brain activity, KTLA reports. Those scans can then be used to generate a treatment plan tailored to the specific patient based on the visual effects of PTSD. Retired Firefighter-Paramedic Matthew Fiorenza, a PTSD sufferer, told the station that the scans also help make the illness more tangible. “Looking at a picture of my brain, it just took the stigma out of it,” he told KTLA. “It’s like, okay, I’m not crazy.”  
Post a Comment
Read Complete Article HERE>»