Commerce is changing around the world. As more consumers want products, services and payments to be available to them 24/7, many institutions are gravitating toward real-time disbursement methods. This alteration will have a serious impact on the way companies do business, offering organizations both challenges and benefits throughout the implementation process.
Why real-time payments?
Customer expectations have changed as the ecommerce sphere improved. Now, clients want an individualized experience and are looking for companies to give it to them, according to Nielsen. Since mobile engagement brings unique options to consumers automatically with the touch of a button and contactless payments allow people to make efficient purchases, why shouldn't the other end of the process be just as fast?
Real-time payments allow people to transfer money from one account to another. Historically, processing of this transaction could take a day or more. With real-time payments, however, the payee would receive the funds within a couple of minutes, while the payer would obtain an immediate processing receipt.
To stay engaged with their audience, businesses – as well as banks – across many countries are looking into real-time payments and what the introduction of the feature would mean for their companies.
"Real-time payments improve overall efficiency."
Do the benefits outweigh the challenges?
In time, institutions will, most likely, have the option to implement real-time payments. However, these banks and businesses need to weigh the advantages and disadvantages before diving in headfirst. Aside from allowing companies to maintain their competitiveness in the industry, real-time payments enable organizations to provide better customer service, lower risk, introduce new forms of purchase and increase overall efficiency, according to Banking Tech. Real-time payment gives banks a stake in mobile commerce and reduces overall transaction costs.
This innovation isn't without its challenges, however. While real-time payments may save institutions money in the long run, it's expensive to introduce a completely new infrastructure, according to Deloitte. In addition, consumers may look to new financial service providers if the system isn't up to their standards, is taking too long to implement or isn't what they're looking for. Some consumers may be wary of the new method, as the older way of processing is ingrained in their purchasing behavior, according to ACI Worldwide.
The push for real-time payments is gaining traction as consumers around the world call for a faster method for transferring money and a personalized commerce experience. While the transition can help companies and banking institutions remain competitive in their market, it is a costly infrastructure implementation. In the end, however, real-time payments will have a serious effect on how people transfer money and how financial organizations interact and engage their audiences.