Transformative upgrades to payments technology aren’t “one and done.” Real-time retail payments could be a paradigm shift in how smaller transactions are sent and received between financial institutions. But first they need to do both — in our research, we’ve found that “receive” is more palatable and more common because of concerns about account takeover fraud for “send,” although as we’ve written, those may be overblown.

Another challenge for payments modernization, as with innovation in other classes of bank technology, is making a careful strategic assessment. Other disruptive payments infrastructure may be just over the horizon — chatter about stablecoins for cross-border payments and tokenized deposits, for example, has risen markedly over the past year. Stablecoin advocacy is quieter than the “decentralized finance will reinvent the financial system” ideology linked to the crypto bubble but may also represent a “shiny object.”

For financial institutions, payments modernization will be a multi-year journey, shaped by strategic decisions about technology, a deep understanding of customer expectations, and attention to the changes in the competitive landscape. We may continue to see upgrades to payment technology as banks and credit unions adopt real-time payments, as those capabilities become more sophisticated, and as payments infrastructure evolves.