Real-time payment challenges and trends
Payment request features have emerged with promises to benefit merchants, financial institutions, and billers. The message exchange service allows payees or creditors to collect payment from a debtor or payer. As a result, payees can benefit from increased control over the payment process, speed up incoming payments, and save time in prosecuting debtors.
But experts say it will take more than updating the Automated Clearing House (ACH) networks to advance digital products and services, including digital wallets. Instead, real-time payments must activate digital channels. RTP, or R2P as it is known in Britain, is a major component of the UK’s real-time strategy. R2P manages real-time payments digitally as the payer receives them on their mobile device, typically through a banking or FinTech app. At this point, the payer can approve or reject the request. If he receives the green light, the real-time credit is transferred to the beneficiary.
This month’s one Real-time payment monitoring® examines the rise of payment request functions and the challenges real-time payment providers face to encourage further adoption.
Developments around the world of real-time payments
The Federal Reserve has updated FedNow, the instant payment service set to launch in 2023. The Fed has said businesses, banks, and consumers will want to use the tool. Fed data shows that a consumer pays an average of at least eight bills per month. A payment tension for consumers and businesses is that the clearing process routinely requires scheduling a payment at least two days before the due date. With the adoption of FedNow Instant Payments, the Fed promises that this will allow expenses to be paid immediately and sent out at any time.
BankProv, one of the oldest banks in the United States, has joined the Real-Time Payments (RTP) network. Created by The Clearing House, this network is a domestic payments platform. It promises to offer new data capabilities and confirm payments instantly. BankProv has partnered with COCC, the Connecticut-based financial technology company, to connect to RTP. David Mansfield, CEO of BankProv, said the bank’s new customers, especially cryptocurrency companies, need to move funds quickly to deal with valuation risk due to currency volatility. Beyond the digital currency community, Mansfield said the RTP network enables banks to reduce risk, improve reconciliation and provide instant settlement of funds.
A banking innovation that allows customers to verify and dispute payments before collection transfers from their account is brought in UK. Request to Pay is a messaging service that businesses can use to pay their bills and other payments. It gives customers the option of communicating with their biller using an in-app chat function. This means that they can query an unusual or unexpected invoice before payment is made or make other payment arrangements. Once approved, the service then transforms the payment request into a bank transfer.
To learn more about these and other stories, check out the Trackers News & Trends section.
U.S. bank explains how leveraging payment requests eases friction and provides visibility into billing processes
The demand for faster digital payments has accelerated over the past 18 months, with companies placing even more emphasis on providing a better experience for customers. By harnessing the power of payment request features, businesses can enable consumers to manage bill payments securely in one place and give them the ability to pay early or instantly on the day the bill is due. In this month’s report, Richard Erario, executive vice president, responsible for global treasury management for American Bank, explains how Request for Payment empowers consumers to control transactions and helps businesses save time and money.
Deep Dive: How demand for payment is shaking up the payments landscape
Businesses and consumers have praised real-time payments for the speed they offer, but these methods offer other benefits. Payment request is a particularly valuable feature, as it allows payers to better understand and control their funds while helping payees monitor and collect unpaid debts more effectively. This month’s Deep Dive explores the rise of request-to-pay functionality alongside real-time payment platforms, as well as the challenges that prevent these services from reaching an even wider audience.
To learn more about how Request To Pay is getting bigger, visit Tracker’s Deep Dive.
About the tracker
The Real-time payment monitoring®, a PYMNTS and The clearing house collaboration, is your monthly go-to resource for updates on trends and changes in the payments space in real time.