The unfortunate reality is that when it comes to payments, community banks are often stuck between a rock and a hard place.
You know your customers expect fast, seamless, secure ways to move money. But the menu of realistic options? It’s short, expensive, and often comes with strings attached.
Here’s what I hear over and over again:
- “The ROI doesn’t pencil out.”
You’re expected to support investments in new payment rails, wallet integrations, and fraud tools—but with little or no new revenue to offset the cost. Most of the upside goes to someone else.
- “It’s a nightmare to manage.”
Wires, ACH, RTP, FedNow, Zelle, debit card rails… and now every fintech wants to bolt on their own solution. It’s a lot to maintain—especially with a lean ops or IT team.
- “Faster payments mean faster fraud.”
Fraudsters are lurking everywhere, eager to exploit weaknesses in risk management in any financial system.
- “The customer experience still falls short.”
Even with multiple systems stitched together, the UX in your digital banking app often feels clunky or confusing. Meanwhile, your customers are comparing you to Apple Pay and Venmo.
- “The vendor choices are narrow—and pricey.”
You’re stuck choosing between a few big-name providers, each with high fees, long timelines, and limited flexibility. If you want something modern or modular? Good luck.
So, it’s no surprise that some banks stay on the sidelines. But that’s probably not the best strategy. Sooner or later you will be forced to act. Sooner is likely better.
Each of the concerns highlighted above has a response. Consider these:
Fraud issues
With faster payments the window to stop a fraudulent transaction is shorter—but that can be addressed by more sophisticated fraud detection. Real-time payments demand real-time controls, and with tools like behavioral analytics and adaptive authentication, banks can actually reduce fraud losses even as they speed up payments.
Lack of offsetting revenue
Faster payments can drive indirect revenue through increased customer retention, deeper engagement, and competitive differentiation. Forward-thinking banks can also create fee-based services around speed, such as expedited business payments or early wage access, to monetize the rails.
The challenge of managing multiple rails
Yes, it’s a headache—but it’s also the new reality. Customers don’t care about what rail their money rides on – they just want it to get where it’s needed within their timeframe. Smart orchestration platforms can help banks route payments efficiently behind the scenes, reducing the operational burden while improving customer experience.
Integration and limited, expensive options
Integration is no small feat, but waiting carries its own cost. The longer you delay, the more likely it is that competitors will define the experience your customers expect. Modular APIs and fintech partnerships can help banks implement faster payments more economically than building everything in-house.
Keep this in mind:
While you’re holding back, competitors—including fintechs and regionals—are moving forward. They’re using payments as a wedge to capture your customers’ attention and shift deposit relationships.
Reassess your current payment opportunities while also keeping an eye out for emerging platforms and payment partners that are designing with banks like yours in mind. The landscape is evolving, and new options are out there—options that might finally align speed, simplicity, and economics.
The future of payments for community banks should be about identifying opportunities for smart integration, better margins, and delivering the kind of experience your customers already trust you for.
If this is something your bank is wrestling with right now, I’d love to hear what’s working—or not.
