Real-time payments are here to stay and with good reason
Real-time Payment (RtP) models are here to stay for the foreseeable future alongside traditional payment schemes. But as businesses increasingly recognize their potential, further cases for real-time payments are coming to the fore. That’s according to Buckzy Payments Inc., the Toronto-based global fintech on a mission to make international payments quicker, more reliable, and more affordable.
Umesh Maini, chief product officer at Buckzy, stated, “Customer-oriented businesses such as retailers and hospitality providers value the increased speed with which they receive funds through real-time payments. In addition, during the Covid-19 pandemic, cross-border online purchasing increased, which put more pressure on liquidity for merchants due to the settlement times involved. But with the pandemic far from over, businesses from a wide variety of industries are also now looking at RtP with increased interest as a remedy to this issue, since with RtP it is the payer that is responsible for and controls the flow of funds rather than the payee and their bank or payment provider.
“RtP not only speeds up client payments – it can also improve cashflows, budgeting, financial projections and cash management,” explained Maini. “And if that’s not enough to get every chief financial officer sitting up and paying attention, RtP also offers an opportunity to support and accelerate other digital innovations and trends, such as expedited bill payments, faster payroll disbursements to workers, and the ability for current account holders to manage their cash better. In other words, it acts as a major catalyst for businesses to digitally transform their business models by being able to accept payments that are settled in real-time.”
“Across the world, tech-savvy consumers and companies alike now want their bill payments, online shopping and cross-border transactions completed instantly, cheaply and at scale. That’s the power of RtP,” added Maini.
Maini summarizes the main benefits for financial services providers to adopt and support real-time payments as follows:
- RtP helps with customer acquisition a real-time payment provides an additional set of services that will help to attract new customers
- RtP removes the need to use costly, outdated fund transfer methods like SWIFT
- RtP provides extra clarity for users to manage cash through up-to-the minute transaction histories and real-time account balances
- Increased revenue through improved economies of scale and customer retention
- Manual processes can be reduced, which in turn saves costs
- RtP enables better customer insights compared with cash, which can then be used by the payment provider to improve their other financial services
- RtP data can also improve anti-money laundering (AML) and fraud monitoring
“As with any major shift in technology, payment providers will face both costs and benefits to upgrade their systems to a new faster payments infrastructure. Investment by providers and adoption by users will both depend on the specific benefits each gains from real-time payments. Consumers today expect to get what they want quickly and at any time, at the push of a button. This also goes for their payments and it’s why RtP will quickly become the new normal,” concluded Maini.