REAL TIME "INSTANT PAYMENTS
THE NEED
Consumers and businesses are moving toward real time (instant) payment options that better align with their needs.
A rapid increase of individuals and companies utilizing instant payment options is changing the paying field and proving beneficial for consumers and businesses alike.
WHY INSTANT PAYMENTS (IPs)?
IPs have attractive characteristics:
1. IPs leverage technology within mobile apps or online bill payment services allowing users to make payments without physical interaction
2. IPs take seconds to complete and payment can be sent without knowing the recipient’s account details
3. IPs make funds available to the recipient almost immediately, a good option for managing cash flow and making time-sensitive payments
PERKS FOR FINANCIAL INSTITUTIONS
IPs provide perks for financial institutions:
1. Stay competitive by better serving individual and business customers, who increasingly want advanced digital banking services
2. Offering IPs options give customers a more comprehensive set of services, which could attract new clients
3. Decreases time spent on manual and paper financials
4. Drives customer retention and reduce costs
INDIVIDUALS BENEFIT
Individuals benefit from the flexibility of IPs, which:
1. Provide the ability to make last-minute or emergency payments and avoid late fees and overdrafts
2 Allow workers to get paid immediately
3. Provide immediate access to funds, while decreasing the reliability on short-term loans
and credit cards
4. Allows a homeowner to pay a mortgage on time to avoid late fees and damage to credit score
5. Simplifies a purchase at a flea market or auction and avoids swiping a card or touching a pay pad
6. Makes payments/reimbursements instantly
7. Allows a user to quickly move funds stored in their digital wallet to other accounts
BENEFITS FOR BUSINESSES
IPs benefit businesses in the following ways:
1. Improves real time cash flow and money management
2. Decreases payment reversal due to insufficient funds
3. Uses a “credit push," which requires the payer to have sufficient funds in their account to complete a sale
4. Allows businesses to receive funds from sales immediately, which increase cash flow, money management and reduce the need for loans
5. Helps suppliers receive payment for contractor materials instantly
6. Online bill pay options equate to faster payment, instant funds, saves on costs for late fees and communications