US FPC's new report highlights how directory services impact instant payments

The report, titled ‘How a Directory Service Accelerates Instant Payments’, offers a thorough inspection of how directory services can improve the safety and reach of instant payments. Considering that instant payments adoption is on the rise, financial institutions, fintech companies, and payment service providers face several difficulties in handling account information, ensuring interoperability, and removing fraud risks. According to the US FPC’s findings, directory services have a significant role in addressing these challenges by allowing the optimal routing of payments and safeguarding sensitive payment credentials. 

The relation between directory services and instant payments 

As part of the report, the US FPC took into account several directory models, underlining their benefits and real-world use cases. Also, it assessed implementation considerations for organisations implementing directory services into their instant payments strategy. The study details that more than half of consumers reported paying a bill late due to several reasons, such as forgetting or insufficient funds. Commenting on the release, representatives mentioned that directory services can augment bill payments by enabling businesses to share an alias rather than sensitive bank account details. Through this approach, they have the ability to scale security and simplify the payment experience for both businesses and consumers.

Furthermore, in addition to bill payments, the report also underlines how directory services can assist in several faster payment use cases, including peer-to-peer transactions and business-to-business payments. With financial institutions and service providers continuing to grow their instant payment offerings, the US FPC mentioned that having a proper understanding of the role of directory services can be fundamental to increasing their effectiveness.