This posting in PaymentsSource is a reminder that instant payments (aka real-time), now making its way across the globe in various new market rails, is a desirable capability for banks who wish to please their corporate constituents. There are lots of benefits in B2B use cases, including better cash forecasting, improved reconciliation capabilities, and potentially lower processing costs.
‘Instant payments give corporate treasurers greater control over their payments, allowing them to make on-the-spot payment decisions and hold on to liquidity for longer…Instant payments enable informed and timely views on cash positions, enabling management of treasury risk. ISO 20022 data- carrying capabilities also allow corporates to attach invoice data to a payment, allowing for more efficient reconciliation.’
The author goes on to point out that the benefits of instant payments also extend to B2C and C2B use cases, which is actually something that we heard when talking to banks in a recently released Mercator Advisory Group member report on real-time payments progress in the U.S. The major banks who have launched connectivity with the RTP system now numbers somewhere around 25-30, and smaller institutions will be coming on board more readily through TPSPs during the next year or two. In our chats with adopter banks, B2C payouts seem to be the major use case to date. There is also a lot of enthusiasm around request for pay. Some other key points include payments through the social media platform apps, which is popular in China, as well as the potential for real-time payments across borders, both of which we have covered extensively. But alas, it does require work to get such instant payment capabilities in place.
‘It is clear that building a foundation for innovation now will enable banks to create points of differentiation and tap into new revenue streams through R2P, QR codes, leveraging enhanced data, corporate instant payments and new channels…But to fully realise the return on investment, banks will need to overcome the legacy payment environments many are encumbered with, and will need to develop a powerful transformation strategy to ensure their payments landscape is equipped to fully harness the benefits.’
Overview provided by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.