Credit union sees faster deposit growth after turning on instant payments

Business accounts at Amplify Credit Union that received at least one instant payment grew 25% faster after the credit union turned the service on. That growth added roughly $1 million in deposits in a single quarter. The figures come from the October Real-Time Payments Tracker, produced by PYMNTS Intelligence with The Clearing House.

What changed

Amplify enabled receive-only instant payments on The Clearing House RTP network. Receive-only means customers can get money instantly but do not have to send it that way. Deposits are the money customers keep in their accounts, and banks care about them a great deal.

Until now, banks have mostly judged instant payments by activity: how many customers use them, how much money moves and how fast it arrives. Amplify adds a new yardstick, which is what happens to the account after the money lands.

What the numbers show

• Business accounts receiving an instant payment grew 25% faster.
• Consumer accounts receiving them grew 12% faster than Amplify's overall portfolio.
• Members who received instant payments were three times more likely to use their debit cards, according to The Clearing House.

The debit card figure links incoming money to spending at the same institution. That is another reason a bank or credit union might want to offer the service.

Who it affects

If you run a business, getting paid instantly can mean cash is available sooner. Your bank may be weighing whether to offer it. PYMNTS Intelligence found that 76% of surveyed financial institutions enable the RTP network for business customers. Another 40% offer FedNow to those clients. FedNow is a separate instant payment service.

For everyday account holders, the lesson is simpler. Banks now have a financial reason to promote instant payments, so more of them may be offered.

What is not known yet

This is one credit union's experience. The material does not say how many accounts were involved or exactly what the 25% is measured against. It describes the growth as associated with instant payments, which is not proof that the payments caused it. It is also unclear whether other banks will see the same pattern.

What happens next

The suggested next step for banks is to compare balances and account growth for customers who receive instant payments with those who do not. If similar patterns show up elsewhere, the case for offering instant payments gets stronger.

Banks are also preparing their systems. Thirty-five percent of financial institutions plan to adopt centralized payment hubs within 12 to 18 months. These hubs coordinate several payment networks, so a bank can route payments across instant and traditional options from one place.