The results show that the usage of digital wallets has increased dramatically over the past year, rising 31% among efficiency-focused firms and 32% among convenience-minded individuals.

According to the research, the landscape is changing as more and more people rely on digital wallets and online banking. This has led to an increase in use cases for instantaneous and faster payments, including bill payments, funding and defunding of mobile wallets, account-to-account transfers, and payroll for employees that is processed immediately.

Federal Reserve Financial Services' Chief Payments Executive, Mark Gould, emphasized the value of resources like the FedNow® Service in addressing the changing demands of financial institutions' clientele. Since its introduction last summer, the FedNow Service has attracted over 700 participants, demonstrating the financial institutions' proactive reaction to these evolving client demands.

According to the report, in 2023, 74% of consumers and 86% of enterprises used speedier or instantaneous payments; a sizable majority of these individuals looked to their financial institutions to supply these services. Federal Reserve Financial Services Executive Vice President Shonda Clay emphasized the advantages of same-day pay for employees, stressing how it reduces late penalties and boosts general employee satisfaction and retention.

The studies yielded significant insights into generational preferences, indicating that younger customers are driving the trend towards digital payments. Digital wallets are being used by more than half of Generation Z and millennials, and 80% of these younger customers think it's crucial to have mobile payment capabilities.

Furthermore, the study highlights the difficulties that customers have as a result of poor payment speeds; of those surveyed, 25% said that they would like better choices for immediate money movement in order to successfully manage their personal finances.

Companies are also adopting speedier and instant payments, claiming advantages including lower costs, more flexible payment options, and 24/7 access to rapid payment services. Business-to-business, business-to-person, and account-to-account transfers are among the primary use cases that enterprises have highlighted. Digital wallet financing and defunding as well as earned salary access are anticipated to be other uses.

The study's conclusion emphasizes the growing significance of quicker and more instantaneous payment solutions in satisfying the changing needs of both consumers and businesses. This has ramifications for financial institutions and their technology partners, who must develop new services and infrastructure to meet these demands.

According to Mark Gould, top payments officer of Federal Reserve Financial Services, "the growing demand for faster and instantaneous payment services suggests that tools like the FedNow Service will continue to play a crucial role in helping financial institutions meet their customers' needs.""

"With immediate payment, employees can eschew late fees and fulfill multiple commitments more effectively," stated Shonda Clay, executive vice president of Federal Reserve Financial Services.