Whether we’re buying a car or a cup of coffee, we expect our payments to go through instantly. But behind the scenes, most payments are still processed using an antiquated system that can take days to settle. This is beginning to change, however, as more and more financial institutions are implementing real-time payments (RTP) systems. With RTP, payments are processed and settled immediately, regardless of the time or day. This offers a number of benefits for both individuals and businesses. For consumers, it means that they no longer have to wait for days or even weeks to receive their money. And for businesses, it enables them to provide a better experience for their customers by offering instant refunds or accepting last-minute payments.
As more financial institutions have integrated real-time and faster payments into their infrastructure, more are turning their attention to the overlay services and specific use cases where they can add value and generate a little revenue. We have seen a couple of reports of real-time payment solutions in the auto industry. The latest is an announcement from Fintech & Finance News highlighting TD Bank. They are now funding their auto dealers in real time for vehicle purchases. That helps to keep deals flowing and helps cashflow too. Here’s an overview from the article:
TD Bank, America’s Most Convenient Bank®, today announced that TD Auto Finance has launched real-time payments for its network of dealers, becoming the first indirect auto lender to roll out the ability to send real-time payments nationwide.
With real-time payments, TD Auto Finance can fund dealers as contracts are booked throughout the day, rather than sending batch payments overnight via ACH. This provides dealers with improved cash flow management and greater visibility into their financial position.
“We understand how important cashflow is to dealers. Our goal with real-time payments is to make life easier for dealers by eliminating the need to wait for payments overnight and giving them maximum confidence in their cash position and ability to operate their business,” said Andrew Stuart, President and CEO of TD Auto Finance. “We’re proud to be the first major auto lender to introduce this capability for dealers and we believe our focus on driving payments innovation is critical to deepening our dealer relationships.”
“We are excited to see TD Auto Finance bringing real-time payments to its dealer customers through the RTP network,” said Steve Ledford, Senior Vice President of Product Development at The Clearing House. “The RTP network is designed to foster innovation so financial institutions can offer their customers value added, faster payment services, such as real-time payments from TD Auto Finance.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group