Real time paymentIn today’s on-demand world, we expect to be able to spend, move and receive money instantly. For this reason, real-time payments (RTP), also known as ‘faster payments’ or ‘instant payments’, are gaining momentum globally.

The Demand for Lightening Fast Payments

RTP exemplifies the unceasing movement toward real-time execution in business. Many activities are in that mode now, from the gathering of customer transactional data for gauging buying preferences, to the second-by-second analyzing of social media imprints, to the continuous accounting (in some companies) that automatically reconciles millions of transactions each day. Most financial institutions, billing organizations and merchants think real-time payments will improve customer service, and most plan to boost spending for payments-related projects, according to new data. The research, gathered by Naples, Fla.-based ACI Worldwide and market research firm Ovum, from more then 1,000 executives of retail banks, billing organizations and merchants, found that 86%, 82% and 78% of those organizations, respectively, anticipated that their customer service will get better thanks to real-time payments. Most respondents also said they expected real-time payments to help cut operating costs. In addition, 51% of the respondents said they will increase their IT budgets for payments-related projects in 2018.

What are the desired outcomes of real time payments?

  • Speed and ubiquity, made possible by electronic solutions for payment clearing and settlement;
  • Security, with incident response that keeps pace with evolving and expanding threats;
  • Efficiency, with more payments being originated and received electronically;
  • International scope, to improve U.S. consumers’ and businesses’ ability to send and receive timely cross-border payments; and
  • Collaboration, so that a broad array of payment participants, from banking institutions to merchants and processors, work together to implement the Fed’s recommendations.

How about my systems and what do I need to think about?

With faster payments being a must have, financial institutions are beginning to realize that payments need to be just as secure as they are fast. To chart a way forward for payment safety and security, employing a variety of approaches for payer authorization, fraud prevention and data encryption will be a necessity. The emphasis on efficiency, taking advantage of real-time messaging approaches that could reduce cost, improve security, and facilitate cross-border transactions is crucial. Application program interfaces (APIs) can enable third parties to develop efficiency-enhancing, value-added services, all while providing  ubiquitous access; resulting in accessiblity to a variety of end users by supporting payments to and from accounts at depository institutions and regulated nonbank account providers.

Learn more in our SEEBURGER Real Time Payment Infographic