If you haven't been paying attention to what Real Time Payments (or RTP) is, you could be missing out on a huge opportunity for your business!
RTP is the immediate transfer, access, settlement and reconciliation of funds. Where older payment methods like cheques, ACH and EFT take longer to reconcile or incur high costs for processing, Real Time Payments provide businesses and consumers access to their funds immediately; without risk and often at lower costs than older forms of payment.
Why is Now the Time for Real Time Payments?
Well, underneath the covers, RTP is very complex, and it took until now to be available, easy to access, and use. Now, some of the largest banks and insurance companies have already shifted to RTP.
And with 85% of executives at technology firms implementing RTP, or planning to in the next 3 years^, ensuring your business is prepared is going to be key to your future success. Real Time Payments also offer a myriad of benefits designed to improve your overall operational processes. With a push to simplification and automation in business ops, RTP lends itself to additional features that can benefit a company's bottom line.
RTP benefits include:
- Cost-effectiveness, transaction processing costs a fraction of cheques, ACH or EFT
- Greater access to real time data with automated information flows
- Reduced fraud with better end user validation
- Flexibility in payment execution and processing with simplified platforms and sign up (no routing numbers required)
- Greater satisfaction of recipients (employees, suppliers, and consumers) who get paid in a more timely manner.
Not to mention, getting ahead of the competition is an added bonus.
The Pay Me Now Mentality - Why are Real Time Payments a Powerful Tool for Your Business
We've seen a drive for all things digital; the need for real time, simplified processes and platforms has become a requirement of your consumers and RTP is nothing less than the realization of this in the payments space.
Instant access to content, communication, services, and more has created demand that businesses adopt the same 'now' mentality. Whether it's a consumer's desire to pay bills in real time on the due date, or a business, need for better cash flow management and reducing fraud, the drive for real time payments is evident.
Ultimately, whether your business pays out employees, clients, consumers or suppliers, they are a part of the pay me now landscape and you will need to find a way to address this. RTP has a multitude of applicable use cases that can help drive your business forward.
The payments space has seen numerous new players come to the table in recent years; fintechs, challenger banks, and more - all offering an easier, more simplified way to do business and banking. But a key standout for these new players is the ability to more easily implement real time payments into their payment ecosystem. Robust, bank account-like services, wealth management services, and flexible online loan services are all utilizing RTP to provide immediate access to funds in a system that previously either hid heavy fees, had unattainable minimums, or took exorbitant lengths of time and processes to access.
In the pay me now landscape, these start-ups are looking at ways to lead the charge and drive real time payments forward, providing holistic, easy-to-use platforms to newcomers looking to get their feet wet. And if you want to stand alongside them, RTP is the only way to go.
How to Enhance Your B2B Supplier Payments with Real Time Payments
A resounding pain point heard among businesses is the disjointed, costly, time-consuming and
difficult to reconcile, accounts payable process. So what if real time payments could significantly reduce the headache-inducing process?
Not a pie-in-the-sky dream, RTP can drastically improve your supplier payments process offering real time virtual payments to payout invoices, providing immediate confirmation of receipt. In turn, your finance team gets a more seamless settlement and reconciliation process with a better cash flow management system and insights into funds availability and finality.
RTP also offers enhanced fraud protection and security. With consumers' personal data on the line, and hacks being more frequent, businesses need to look to solutions that counter and limit these occurrences. Cheque fraud, for example, is still one of the largest forms of fraud risk for businesses, and RTP eliminates this problem. Not only is RTP more cost-effective than cheques but RTP also offers more immediate information flow and robust data on payment and transaction activity.
What real time payments offers is beyond merely faster payments, but also lower cost, more secure payments, and as more and more companies begin to adopt RTP, the additional benefits become apparent; RTP is changing the payments landscape and you should be hopping on board.
How to Strategically Drive Revenue and Consumer Loyalty using Real Time Payments
If a large portion of your business revolves around consumers purchasing behaviour, you're probably already familiar with promotional rebates, claims disbursements and more, depending on your industry.
The 'now' mentality has trickled down through every facet of a consumer's lifestyle from social media to shopping; consumers expect everything at the drop of a hat, and the flexibility to choose how they receive it.
Use real time payments to strategically drive revenue and loyalty by offering real time promotional redemptions and disbursements. Whether you offer a $50 rebate on a purchase over $300, or need to disburse an insurance claim to a client, RTP can give you an advantage your competition likely doesn't have yet; immediate access to funds.
Additionally, consumers want the flexibility to choose how they receive funds. With fintechs and challenger banks targeting newcomers and the unbanked, drive loyalty with your consumers by providing flexibility in choice, whether they want their disbursement loaded to a prepaid card, or direct to their debit account with products like DirectSend.
How to Drive Employee Engagement with Real Time Payments
If your business is powered by a gig workforce, RTP enables you to payout your workforce in real time as jobs are completed. With most gig workers saying they have multiple gigs to bring in sufficient income, how can you as a business keep your workforce engaged and focused on you?
Well, adopting the pay me now mentality is the first step. 84% of gig workers say they'd do more gig work if they were paid when the work was done, and only 17% of gig platforms are currently able to accomodate this.
By integrating real time payments into your existing payments platform, you can expand your workforce's capability - so why wouldn't you take advantage of making the most of your workforce?
All in all, real time payments is taking major strides towards changing how businesses payout and are paid, and it is time you take notice and get ahead of the curve.
Sources:
^https://www.pymnts.com/wp-content/uploads/2020/01/Making-RTP-a-Reality-January-2020.pdf
