Immediate payments making big strides

The ever-changing landscape of payment options – from cash and cheques to wire transfers and now immediate payments – has evolved each step to keep pace with a snowballing need for faster payments.

 

What used to take days or even weeks can now take seconds, thanks to emerging immediate payment trends. Immediate payments are real-time electronic transfers between accounts, providing instant availability to the receiver.

Key money transfer apps such as Venmo, Zelle and CashApp will be familiar to most consumers. But while these each have their own pros and cons, they are built to serve consumer markets and aren’t set up to support businesses in their growing need to provide immediate payments to their employees, clients, and vendors.

 

This is where immediate payment systems such as the innovative FedNow Service and Real-time Payments (RTP®) platforms come into play. These two payment platforms allow eligible depository institutions to provide immediate payment services to their clients. These payments can be sent 24 hours a day, seven days a week, including weekends and holidays. Depository institutions can determine if they want to accept and send payments, or if they prefer to simply be on the receiving end of things. Real-time Payments is owned by The Clearing House and, until 2023, it was the fastest option available for financial institutions to offer their clients.

 

FedNow is the US Federal Reserve’s equivalent to the RTP platform. Launched in July of 2023, only 35 financial institutions served as pilot testers of the platform from day one, including industry leader 1st Source Bank. Having also signed on to the RTP platform in March 2023, 1st Source was able to provide both options to their clients for sending and receiving immediate payments.

 

These platforms have been leveraged by 1st Source Bank for strategically targeted use cases. Services such as cash concentration and account-to-account transfers, employer-to-employee payments including reimbursement and same-day payroll, along with other business payments such as franchise lease fees and rent payments, have contributed to early success with both platforms. As clients better understand and use these immediate payment platforms, 1st Source has been able to expand use cases to include things such as utility payments, invoicing for local businesses and requests for payment. These more specific use cases have enabled the bank to impact the local economy, furthering its mission of helping clients achieve security, build wealth and realise their dreams.

 

“1st Source Bank takes pride in its leadership role in the immediate payment space,” said Andrea Short, President & CEO of 1st Source Bank, and President of 1st Source Corporation. “One of our standout success stories comes from a client who walked into a banking centre with an emergency request – to send money right away to an employee driving one of his company’s trucks. Our customer wasn’t sure how he would send the money and make it available right away, so it was the perfect opportunity to illustrate the unique value of immediate payments over traditional payment options. The money was delivered to the driver within seconds and our customer learned first-hand, in real-time, the value of immediate payments. We were able to help precisely when our customer needed us to provide a solution.”

 

This was not the only time that 1st Source Bank has stepped up as a leader in the immediate payment space. In February 2025, the bank joined the Faster Payments Council (FPC), an industry-led membership organisation helping to shape the future of the US national payment system. It was created so Americans can safely and securely pay anyone, anywhere, at any time with near-immediate funds availability. Additionally, the FPC focuses on the larger goals of safety, security and adoption of all faster payments. Now, with the addition of the FPC membership, 1st Source brings valuable insights to the table while putting itself in a position to be on the cutting edge of faster payment technology information.

 

As the immediate payment space evolves, consumers might begin to worry about new ways for fraudsters to steal their personal information or hard-earned funds. Both the Federal Reserve and The Clearing House have made fraud-prevention on these immediate payment rails a high priority. Both systems were built with anti-fraud onboarding controls, fraud flags and ongoing monitoring (to name a few protections) to stop fraudulent activity before the payments are processed.

 

Immediate payments are quickly becoming table stakes for financial institutions and should be expected by consumers and businesses alike. The benefits of immediate payments will have far-reaching effects to align the payment space with the ever-growing need for speed in all areas of business and consumer life.

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For more information about 1st Source Bank’s immediate payment capabilities, visit: Immediate Payments – 1st Source

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by Hannah Nichols, Public Relations & Communications Manager, 1st Source Bank