Real-Time Payments Steps Up To Fulfill Demand For Faster Funds
To paraphrase the movie “Top Gun” … “We feel the need … the need for speed.” The payments ecosystem now prizes quickness above all things in a time of cash flow shortages, where each paper check takes an eternity — assuming it arrives at all.
Clearly, paper checks aren’t cutting it anymore. We’ve evolved. It’s time to embrace it, especially for financial institutions (FIs) and adjacent players that intend to stay relevant in this market.
“Financial institutions (FIs) and other financial services providers are looking to help meet the need for speed by leveraging various faster payment rails that support an array of payment methods,” according to PYMNTS’ latest Real-Time Payments Report done in collaboration with The Clearing House.
The report continues, saying that “peer-to-peer (P2P) payment apps and push-to-card offerings are gaining traction among consumers who want simple, user-friendly ways to receive and send funds, for example, and businesses are abandoning checks in favor of swift, robust offerings like same-day ACH and the real-time payments rail from the RTP® network. The appetite for new payments approaches is only growing, with The Clearing House (TCH) reporting that 400 more FIs have already gained technical access to the RTP network.”
RTP Doing Its Part for a Quicker Recovery
Desiring to access faster rails and the electricity around P2P transfers, consumers and businesses are driving the market’s obsession with speedier money during recovery.
And the market is responding with creativity, innovation … and velocity.
“With customers requesting new options for payments, financial institutions quickly responded, and many FIs provided access to real-time payments on the RTP® network,” Russ Waterhouse, executive vice president of product development and strategy at The Clearing House, told PYMNTS. “For instance, some FIs on the RTP network provided Paycheck Protection Program loan payments in real time, which helped struggling businesses meet payroll obligations to employees. Other businesses [that] encountered supply chain disruptions worked with their FIs to provide real-time payments to new suppliers, which often required payment in advance of an order being shipped.”
The new guide further notes that “consumers and larger businesses are not the only ones that want speedy transactions, with a PYMNTS survey finding that many microbusinesses are more likely to partner with payers that offer instant payment experiences. This makes it important for businesses to adopt faster payment methods as well as inform partners about their options. PYMNTS’ findings indicate that many microbusinesses are unaware of the full extent of payment choices their partners offer: 78.8 percent of payers said they provide these options, but only 52.7 percent of microbusinesses said such choices were available to them.”
More FIs Onboarding
With real-time payments becoming more real every day, awareness is climbing – and with it, so is demand.
According to the latest Real-Time Payments Report, “Another factor that could lay the groundwork for rising RTP network uptake is that many financial services providers are now ready to offer connections into the rail on behalf of interested FI clients. Connecting to the RTP network via a third party spares banks and credit unions from needing to do that integration work themselves, allowing for quicker, simpler implementation.”
There’s no shortage of interest or activity as more FIs begin offering and promoting RTP.
“For the RTP network, interest from FIs quickly accelerated as they saw their customers looking for ways to make payments even faster,” TCH’s Waterhouse told PYMNTS. “FIs of all sizes are being onboarded each month, which really is [a] testament to how important real-time payments are during the COVID-19 pandemic and to the future of the economy.”