Instant Payments Surge to 73% Adoption: Can Security Keep Up?

By Gloria Methri

Instant payments are gaining popularity, with 73% of consumers adopting them over the past three months, according to Discover Global Network’s 2024 Payments State of the Union report. The study reveals that real-time bill payments (82%), business payouts (80%), and account transfers (76%) top the list of instant payment uses.

Yet, while consumers seek faster transactions, they demand security just as strongly—51% consider data protection essential when trying new payment options, and 71% are willing to adopt extra security steps for peace of mind.

Dual Demand for Speed and Safety

Merchants share consumers’ enthusiasm for instant payments but prioritise security to prevent fraud, which remains a pressing issue. About 61% of merchants view payment acceptance as a strategic differentiator, recognising that a seamless payment process enhances customer experience, strengthens loyalty, and boosts business performance.

To remain competitive, 75% of merchants emphasise the importance of offering a diverse array of payment options and robust fraud prevention mechanisms. The report notes that “Tap to Pay” on mobile (93%), instant payments (92%), and digital identity (88%) are among the top technologies merchants expect to drive value.

However, fraud has intensified over recent years, presenting new challenges for merchants. Payment fraud, new account fraud, and friendly fraud—where consumers dispute valid purchases—are now significant issues. With bot attacks also on the rise, 38% of merchants identified reducing fraud and chargebacks as a top priority, highlighting a gap FinTechs must address.

This presents an opportunity and a challenge for FinTechs. The report underscores that FinTechs, while critical facilitators of consumer and merchant payments are also navigating an increasingly complex landscape. Approximately 93% of FinTechs see instant payments as a key emerging area, particularly for business-to-business (66%), business-to-consumer (57%), and consumer-to-business (55%) transactions. Security remains equally important, with 92% of FinTechs prioritising both fraud prevention and payment data security as top initiatives.

Artificial intelligence (AI) stands out as a promising solution: 44% of FinTechs are exploring AI to improve their fraud prevention efforts, and half aim to deepen their AI expertise for more advanced security solutions.

“The FinTech ecosystem is having a transformative impact on our everyday lives. We are seeing a lot of adoption and maturation of financial services from consumers and businesses,” said Jennifer Cruz, SVP of US Acceptance & Credit Issuing, Discover Global Network. “That said, FinTechs walk a tightrope between consumers who expect instant and convenient payment experiences and merchants who demand seamless integration and security. As a leader in financial services and in our fourth year of surveying thousands of decision-makers within the payment ecosystem, this study should help FinTechs with their persistent balancing act.”