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Consumers live in a next-day Amazon Prime delivery world, one in which Uber instantly shows how far away a ride is. Similarly, they expect financial services to work immediately and transparently. Long after payments companies enabled buyside immediacy through credit cards, the settlement side of the equation is finally moving to real time as well. Earned wage access, popularized by Uber and Lyft, allows drivers to receive a portion of their pay immediately. Visa Direct and MasterCard Send are examples of services that enable those transactions. Request to pay is an emerging real-time payments mechanism in development in Europe, the UK, India, and parts of Asia. Its primary innovation is how it works across multiple platforms and channels—unlike, say, Venmo Request, which only works on Venmo, it does this while limiting the financial information needed to complete transactions. FedNow is an instant payment service expected to launch in 2023. It will provide a platform for banks to build instant settlement services; the system is expected to be widely interoperable. In response to the slow adoption of instant payments in the Eurozone—fewer than 1 in 10 euros credit transfers currently qualify as instant payments— the European Commission is proposing expanding instant payments regulation. It would mandate, among other things, that retail banks use PSD2 API infrastructure for incoming and outgoing instant payments, removing the existing price premiums.

Instant payments

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