Real-time payments satisfy consumer demand for instant funds access, stimulating commerce. What is driving its growth? Should traditional banks integrate this option, and how can it be done? In this article, we will figure it out.
What Are Real-Time Payments?
Real-time payments are transactions between individuals, businesses, and governments within seconds. They are available anytime, including holidays, weekends, or night hours.
This concept is not synonymous with “quick payments,” which work faster than traditional payment systems (but not instantly).
Real-Time Payments Growth Drivers
Real-time payments are setting a new standard for consumers and companies. But what drives their development?
Physical wallets with cash are no longer the most common payment option in developed and developing countries. New technologies such as digital currencies, social platforms, and NFC further push the emergence of new P2P payment providers.
Innovative fintech startups offer new payment options that are more convenient for companies and their customers. The most influential include biometric authentication, fraud detection tools, and instant availability of funds. RTP becomes an essential element of operating model optimization.
Tech-savvy consumers are already used to having all services available in real-time. You can pay for a product or service in a few clicks. It does not create tension as with stuck payments and provides greater flexibility of action.
RTPs are very attractive to both small businesses and large retailers. They allow you to manage cash flows more efficiently and reduce fraud.
Companies and customers want instant and easy payments, regardless of location. More and more countries are implementing efficient payment solutions, increasing pressure on regions that still need to do so.
RTP and Banking Software
Banks risk losing customers due to new fintech providers with convenient RTPs. On the other hand, by providing such services, they stimulate consumer spending. You can create new payment channels and increase revenue. In addition, banks can reduce the costs of payment operations and attract new customer segments.
Banks can expand their payment solutions and remain competitive by cooperating with fintech companies. The following solutions will help you integrate RTP into banking software:
- Adherence to industry standards and protocols facilitates interaction between various components of the financial ecosystem. This is especially true for cross-border transactions.
- APIs help quickly integrate real-time payment capabilities into the core banking system.
- With middleware, you can connect RTP to existing legacy systems.
- Cloud solutions allow you to deploy instant payment services flexibly and access them from different devices. In addition, it reduces capital costs.