In the world of the payment industry, real-time payment as an instant payment has got a solid foothold. This payment system is getting momentum due to the introduction of new schemes. Advancement in technology is bringing advancement in the real-time payment system.
It is beneficial for almost everyone whether it is a businessman, organization, or an individual who is paying a restaurant bill. Real-time payment is accompanied by many advantages like a quicker, safe, and secure method of payment. It ensures better cash management. Hopefully, real-time payment will revolutionize the payment landscape.
What do we understand by real-time payment?
Real-time is a technology-based system of making payments. It allows immediate transfer of money between banks and the banking system. It is a convenient and faster means of transferring funds. Earlier for the access of the transferred money or fund, at least one business day was required. But the introduction of real-time payment made it possible just in a matter of minutes.
How does real-time payment work?
The real-time payment system is an instant process of transferring funds. It is a 24*7 facility that can be used by anyone at any time. Channels like smartphones, digital wallets, tablets, and the web are some of the common channels. This fund transfer can be initiated through any of these channels. A real-time payment request when made, account to account payment fund can be transferred.
Benefits of real-time payment
- Real-time payment reduces the fraud risk.
- It improves the relationship between customers and merchants.
- There is a minimal cost of payment in a real-time payment system.
- Customers get high-value services.
- It facilitates the immediate and faster transfer of funds.
- Payments can be made 24*7 anytime anyone by anyone.
- One can get the status of payment and confirmation via message immediately, just with one click.
Three types of payment done by real-time payment method
Person to business is the common type of payment done by using the real-time payment system. P2B is basically monetary transactions made between customers and businesses. It comprises every non-payroll payment issued to a person to a company. These payments include insurance claims, healthcare reimbursement, loan disbursement, and legal settlement.
Person to person is a type of online and real-time payment method. In this, customers can transfer money from their account to another person’s account using the internet. Nowadays people find it more convenient to pay bills using real-time payment.
Business to business payments are the transactions done between one and more merchants. It includes the exchange of currency for goods between businesses. Real-time payment helps businesses to handle all types of transactions.
Who can be the end-users of real-time payment?
The real-time payment system is beneficial for financial institutions, consumers, merchants, and many others. It allows better cash management. Businesses and retail & E-commerce can manage day-to-day operations and raise funds. Various other sectors like BFSI, IT & telecom, travel & tourism, government, healthcare, energy & utility also find this real-time payment helpful. This payment system has a positive impact on their sales and cash flow.
Real-time payment can be deployed from
Cloud: nowadays the cloud-based real-time payment is in demand. This is mainly due to increasing mobile-based payments across the globe. Retailers, as well as customers, prefer to opt for cloud-based real-time payment due to its convenience to use the feature.
On-premise: businesses all over the globe are ready to adopt on-premise real-time payment solutions. Using this type of deployment method, merchants ensure a safe payment system for their customers.
Reasons why real-time payment is gaining attention
From past few decades, various technological advancement has been done. Increased adoption of smartphones in both developing countries and developed economies. Person-to-person payment popped up on daily basis, due to the increasing use of social media platforms. So rapid advancement in technology is leading to increased demand for real-time payment.
Higher expectations of consumers and merchants
Both merchants and consumers want to have an authenticated and fraud-free payment system. Merchants wish to give an increment value to their customers. Small and average businesses need to have a better cash management system. Consumers nowadays expect almost everything in a real-time payment system. They want fewer click to pay bills or transfer money directly to account.
New business models
It is a history that the financial industry can only control the world of payments. As new startups and partnership are in trend which has started introducing newer and better options of payment. Various mobile payment apps have been introduced with advanced features.
The bottom line
The real-time payment Market has been witnessing rapid growth due to increasing preference for instant and secure payment by businesses. Real-time payment is a technology-based payment method. There are three basic types of payments done by using this technology that are P2P, P2B, and B2B.
People find it more advantageous to make out transactions using real-time payments. That is why its adoption is in demand.