Will FedNow and BNPL dent credit card use?
Will FedNow get any traction beyond business payments? Are the standalone buy now, pay later firms that pioneered the sector going to fizzle? Should consumers avoid the pay-by-bank trend? KBW analyst Sanjay Sakhrani takes a critical look at the hottest payments innovations.
The promotion and publicity touting the debut of the FedNow instant payments service has been mammoth.
But at least one analyst is underwhelmed by what is easily among the biggest developments in the payments sector to come along in years.
Sanjay Sakhrani, a managing director at Keefe, Bruyette & Woods who specializes in payments and consumer finance, says he can see some appeal for businesses to tap FedNow through their bank or credit union.
For that customer segment, “there’s a strong value proposition for instant payments, because most of them use the traditional automated clearinghouse,” he says. “This just speeds up ACH.”
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