The Internet has brought some things that made our lives a lot easier. One of them is cashless transactions. It is one of the fastest-growing developments in the financial industry. New payment networks and service providers are emerging all the time and so are the announcements about their services. This obliges the financial institutions in some manner to prepare to meet the expectations of the clients who prefer instant payments, whether they themselves prefer regular or real-time payments generally. It is logical that the clients want to move their money quickly whether it is an emergency or a regular payment they want to make. Also, not having to pay in advance for different expenses, makes you hold your money until the very last minute, so that way you get to organize your finances better than when you have to pay several days in advance. The benefit only increases for big companies, suppliers, or contractors who move larger quantities of money than a regular person.
Getting Ready for Real-Time Payments
If you want your company to start doing real-time payments, your infrastructure must correspond to the demand. Some companies already have the ground set to start with this but others need to make some improvements to meet the challenge. Let’s see which four components should be present in your infrastructure to satisfy the minimum of the expectations when it comes to preparing for instant payments.
● The core banking system is the first component and it is a foundational one. This has to be enabled for sending and receiving payments. It is not necessary that hard posting be instant as well, however, the financial institutions nonetheless need the potential to adapt their access form to access the funds straight away.
● Network connectivity means that instant payments demand connection to some real-time system/network like TCH to make payments to and from the core banking system easier.
● Digital channel capabilities display the payments and all the messages related to your TCH or any network you use for that matter. The ways to achieve this connection are various, it can be through API calls and or database pushes.
● Risk evaluation is another crucial aspect associated with real-time payments. Every channel you use has to be reviewed for risk possibilities and the future solutions or mitigations of the same.
The benefits and challenges of real-time payments
Forbes magazine cited that real-time payment could change the way that businesses operate. The main advantage is that they are much faster and they are contactless. The Covid19 pandemic has accelerated the usage of non-contact payments, although they were already gaining popularity. This way, they attract more people and the web of instant payments expands further. To add some statistics into this article, The Citizens survey found that 75% of businesses still accept paper checks but 41% are negotiating with their banks the possibility of moving to real-time payments. Another benefit is that the money can be transferred after business hours and on weekends.
The main concern of real-time payments is control and security since some people are worried about these two aspects. People don’t usually have trust when it comes to sending their money somewhere. This is why you should always inform well and use a trustworthy platform, which will be discussed in the next part.
Different platforms for e-banking
There are plenty of options nowadays for processing your payments that you can choose what suits you the most. For example, Cuscal Payments offer a wide range of services, like debit cards, credit cards, prepaid cards, etc. Instant payments is another service that you can obtain. One should be prepared for innovations and have all the options available, so services that offer all of this can be a good option for anybody. This set of services includes different ways of accessing and payment, different types of cards, and fraud services among other things. Fraud services are especially important because they protect you and your funds against phishing attacks, social engineering, malware, etc.
Different speeds for different situations
The fact that you enabled the same-day payment options does not imply that this system would overtake your other financial methods when it comes to moving funds. The transactions will also depend on the time and urgency for a person to receive those funds, so real-time payments will have different speeds for different situations. Take Amazon as a reference, they offer different speeds and different prices whether you want it today or in a couple of days. Another example of real-time payment paying off is when a distributor adopts a real-time payment service to pay a supplier. This happens when it takes ownership of goods, and it is done because it is a more fluid situation and the payment can´t be scheduled much time in advance.
The adaptation to new forms of payment is important because it can make you save your time, avoid needless contact in times of a pandemic, and also to be able to organize better your savings, expenses, and generally your overall funds. Consider going cardless and discover the instant payments, but make sure you know all of these tips before involving with that.