How Real Are Real-Time Payments?

Real-Time Payments in the US

What would be the motivation for the corporates to move onto this platform?

Corporates are pushing for better payment services from their banks. They want payments cleared in smaller periods. Certainly, what is behind this motivation is better visibility on cash flow, inventory management, and the credit component. And the biggest push would be the rich data that can go beyond what any other platform type has

The value proposition it holds for the corporates

• Built on message format ISO 20022 which is supported by most ERPs
• Immediate funds availability with instant confirmation for incoming/outgoing transactions
• High opportunity for value-added B2C disbursements for healthcare or insurance verticals
• Ability to send requests for information, send additional remittance advice, and send acknowledgments over secure RTP rails
• Request for payment that takes the place of the debit. It sends you the message or reminds you to pay if you owe any money
• Availability, which is 24/7 allows quicker settlement times to achieve order fruition

What will be the impact on Receivables Management?

RTP RFP has initiated a new way to control your receivables-payment and information flow altogether. It guarantees:

• Improved Cash Forecasting
• Real-time view of cash positions
• Immediate liquidity is driven by instant availability of funds and irrevocability
• Accelerated DSO
• Instant acknowledgment, linked data, and two-way communication capabilities
• Auto-posting using integrated data

Why should you move to Real-Time Payments?

All the Right Reasons:

• Instantaneous Settlement – It is usually cleared within 5 seconds and you can send and receive payments around the clock, 7 days a week, 365 days a year.
• Rich Data – It is encapsulated with rich data that is easily available, making it able to achieve straight-through cash processing and reconciliation ergo making the cash flow effortless.
• Irrevocable – It’s like wire payments, it’s irrevocable that means once it’s settled you will not be able to pull it back thus eliminating the risk of returns, reversals or chargebacks.
• Security – Limits the reach of cyber-attacks and frauds.
• Customer Experience – It provides a seamless and frictionless client experience.

The Journey Ahead

It is the trend that cannot be defied as it has extensive benefits for all. The Real-Time Payments ubiquity must be the ultimate goal. Organizations need to build a flexible technical infrastructure and be ready for a world where payments will be truly instant. For now, real-time payment models will continue to exist next to the other payment systems but will be a more reliable choice.