Plaid Adds Instant Payouts to Its Transfer Tool

Open banking platform Plaid says it is giving users the ability to make instant payouts.

The company announced Thursday (April 13) that it was adding an instant payout feature to the Plaid Transfer product.

This means users can make transactions through the RTP (real-time payments) network as well as via automated clearing house (ACH) payments, a change that arrives at a time when consumers are growing more accustomed to faster payments.

“At Plaid, we believe that you should be able to access your money when and where you need it,” the company said in a news release.

“More importantly, the experience should not come at a steep cost. This is why we built Instant Payouts — a real-time, multi-rail payout solution to send funds instantly, 24/7.”

Plaid contends that while the ACH system is prized for its cost-effectiveness, flexibility and ubiquity, it still lacks in speed, with settlements sometimes taking days. That can be tough on gig workers who need to wait days for extra cash.

“Even if there is an instant option, they have to typically connect a debit card and pay a 0.5% to 3% premium,” Plaid said. “With the current economic uncertainty and bank volatility, people deserve their cash when and where they need it.”

PYMNTS research finds that consumers have grown used to faster payment methods in most areas of their financial lives, with 7 in 10 saying that access to quick payment capabilities makes them more satisfied with their financial institutions.

“Expanding these capabilities to all of a customer’s regular bills is thus low-hanging fruit for service providers,” we noted earlier this week. “Nearly half of consumers reported that online channels improve the payments and billing management experience, while 29% said that digital portals make their experience more convenient.”

Meanwhile, one survey showed that a little under half of all American and Canadian companies reported a positive impact from faster payments, a number that balloons to 92% when taken to a global scale.

This discrepancy is likely due to the wider prevalence of instant payment networks in the rest of the world, meaning that global companies have more exposure to their benefits.

Plaid is launching this new product three months ahead of the debut of the Fed Now system, which — as noted here — will forever change the country’s payment ecosystem.

When FedNow launches in July, PYMNTS wrote, “its real-time rail will speed up money movement between accounts, transform bill payments and bring instant payments to a variety of use cases yet to be imagined.”