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Real-Time Payments: Accelerating Business and Consumer Transactions

The demand for real-time payments has grown exponentially over the past five years. Despite this demand, only a small number of businesses and consumers have access to them.

Studies show that instant payments only account for 2% of corporate disbursements sent and just 1.3% of payments received.

However, this is rapidly changing as more merchants and customers seek faster payment options.

This article will explore how organizations can deliver speedier payments for both consumer-to-business (C2B) and business-to-business (B2B) transactions, as well as the benefits of deploying this payment option.

Partnering with Banks and FinTechs on Real-Time Payment Technologies

FinTechs have invested an average of 23% of their annual revenues into adding instant payment capabilities over the past three years. This investment makes them valuable partners for businesses looking to accelerate their payment experiences. While many FinTechs leverage The Clearing House’s RTP network, other instant payment methods are becoming popular as well.

For example, 33% of FinTechs intend to adopt instant account transfer options, and 27% plan to adopt instant prepaid card deposit options over the next three years.

Big banks are also developing new payment technologies to accelerate transactions.

One joint initiative from Bank of America, JPMorgan Chase, Wells Fargo, and four other institutions will offer customers the ability to pay merchants via digital wallets by the end of the year. Services like these promise to revolutionize not only the consumer payment experience but also the B2B payment scene.

Larger businesses are particularly interested in developing faster payment capabilities. 89% of companies with revenues of over $1 billion say that real-time payment capabilities are important versus 63% of those with revenues between $250 million and $500 million.

69% of businesses across the board plan to expand their real-time payment capabilities or are currently doing so, many with the help of FinTechs and financial institutions that leverage the RTP network.

Benefits of Payments Acceleration

Speeding up payments not only benefits consumers, but also helps companies with their cash flow issues. Payment approval and acknowledgement are instant, meaning that companies are immune to having payments bounce back days later, throwing their accounting processes into chaos as they figure out cash flow reconciliation.

54% of companies deploying instant payments expect lower costs due to these benefits, and 50% say they will gain new customers and suppliers. Another 49% believe they could reduce the likelihood of fraud or theft, while 35% cite improved payment process transparency.

All these added benefits make faster payments an obvious choice for corporates looking to improve both consumer and B2B payments.

The Bottom Line

Real-time payments are revolutionizing the way businesses and consumers conduct transactions. With more FinTechs and banks investing in instant payment capabilities, faster payment options are becoming increasingly available to more organizations.

Deploying real-time payments offers many benefits, including lower costs, increased customer and supplier acquisition, reduced fraud, and improved payment process transparency.

As the demand for real-time payments continues to grow, businesses that fail to offer this payment option risk being left behind in an increasingly competitive market.

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