Explore the Many Benefits of Instant Payments for Credit Unions

By Ashley LaBombard, Marketing Associate, Sharetec
September 21, 2024

In today’s financial world, you are bound to hear about instant payments, but what are they, and how can they benefit credit unions? An “instant payment” is exactly what it sounds like; a person can make a financial transfer that becomes “instantly” available in the payee’s account.

As this form of payment grows in popularity, more and more financial institutions are signing on with providers of instant payments to provide customers with not only what they want, but also what they now expect. Many consumers consider access to real-time payments a criterion when selecting a financial institution.

Benefits for Your Credit Union

While capabilities may vary depending on which instant payments provider you choose, there are many benefits to implementing this offering.

Avoid the Higher Costs of Other Payments: Credit cards come with interchange costs, and wires are also costly. By leveraging instant payments, your credit union can save money (including labor costs for needing more staff involvement with wires).

Fraud Controls: All FIs are vulnerable to fraud, including credit unions – in 2022, the Voice Intelligence & Security Report found that credit union fraud rates had increased 70+% that year. So, naturally, fraud elimination, reduction, and mitigation risks are imperative to implement. With an instant payments program, your credit union can rest assured when it comes to fraud, as you will be able to implement controls based on cumulative value and velocity parameters. The system will further learn to detect fraudulent events based on historical activity.

Customization on Limitations: Instant payment providers offer credit unions flexibility when it comes to setting limits on the amounts that can go out at the RTM level. There are capabilities to change the limit for specific members and to determine who gets access to instant payments (and what their limits will be). Your credit union will have full capabilities from the management console and can ultimately control what members you turn settings on for.

Data and Reporting: Your instant payments should provide tools to support data analytics and reporting in a Rich Data Format (RDF), to support large amounts of structured and unstructured data for each transaction.

Improve Member Acquisition and Retention: Members are looking for an instant payments solution, and by adopting one, your members are less likely to seek out another FI. You can accept more deposits, be seen as more relevant, and provide members with what they’re asking for before it’s too late. You’ll also boost your competitive advantage, as you’ll now have more capabilities than most FIs and as much as leading national banks and credit unions.

API With Workflow: Employees can experience improved work efficiency with communication protocols for accessing information and transactional processing.

Benefits for Your Members

Many of your members’ benefits align with those your credit union will experience. The most noteworthy benefit to your membership, however, is convenience.

Members can instantly pay their bills, hit last-minute deadlines, get their employees paid, and make instant payments.

24/7/365 Availability: Not all payments, including ACH and wires, are 24/7/365. Instant payments are, though, including holidays, weekends, and nights.

Instant Payments for Everyday Use: Members can make payments anytime, anywhere. When it comes to paying bills, members with access to instant payments can send and receive funds instantly.

Instant Payments for Business: With instant payments, you can increase employee satisfaction by implementing payroll on demand. Receiving invoice payments and accessing funds immediately can strengthen cashflow.

Connect with Sharetec to learn more.

About Sharetec

Sharetec is a cutting-edge technology company providing the latest in core processing software. Sharetec’s robust, yet easy-to-use, web-based core includes everything needed to run credit union operations and create an effective digital experience for members.