Slow payments have long frustrated businesses and consumers, forcing the former to readjust their timelines as they await funds and prompting the latter to put off purchases as they watch for transactions to finalize. Financial services providers have looked to solve these frictions using real-time payment tools, and their efforts are being realized as businesses and consumers alike grow more comfortable with new banking technologies.
Peer-to-peer (P2P) payment apps have become particularly appealing to consumers during the COVID-19 pandemic, with P2P app Zelle reporting rises in the number of transactions and transactions’ values in recent months. PYMNTS’ data revealed that many consumers are now seeking real-time access to their funds, with 35.2 percent of them stating that receiving such access to funds is “very” or “extremely” important.
Consumers’ growing familiarity with P2P apps and the pandemic’s effects on business operations are also rubbing off on companies, prompting many to reexamine the use of real-time payment solutions. Firms have long resisted shifting away from the paper-based payments and invoices to which they’re accustomed, but many can no longer afford to wait for funds as they struggle to stay afloat.
The November edition of the Real-Time Payments Report, a PYMNTS and The Clearing House collaboration, examines how the rise of P2P apps is influencing businesses’ and consumers’ decisions to seek real-time payment solutions for their needs.
Around The Real-Time Payments Space
Real-time payments are picking up steam around the globe, with one recent report finding that 56 countries have real-time payment networks set up within their markets. It also noted that more than 150 financial institutions (FIs) in the United States are working to offer such solutions thanks to partnerships with TCH that enable them to use the latter’s RTP(R) Network. This represents a staggering fivefold increase over the number of American banks that reported being able to access real-time payment capabilities in September 2019.
Some businesses are still reluctant to implement real-time payments because other facets of their operations are designed with slower payment time frames in mind. Many are holding off on adopting these innovations because they could greatly affect cash reporting processes, Sara Cichoski, vice president of eEnterprise money movement at U.S. Bank, representing Elavon, explained in a recent PYMNTS interview. She said that reaching out to businesses to convince them to implement real-time payments will be critical to ensuring the adoption of such systems in the future.
Consumers’ spending habits are also growing increasingly digital, leading many to seek out cross-border payment services as they look to pay merchants or send funds to individuals in other countries. To that end, card network Visa is expanding the scale of its international money transfer service by partnering with a third-party FinTech. The partnership will help Visa expand its Visa Direct network-enabled solution to consumers in 32 European markets, the company said.
For more information on these stories and other real-time payments headlines, read the Tracker’s News and Trends.
Employers and workers alike are looking to better manage their finances during the pandemic, but traditional payroll cycles are making it harder for both parties to do so. The former must often set aside payroll funds days in advance, leaving them with less financial flexibility to handle their expenses in the meantime. Employees, on the other hand, must wait weeks or even longer to receive their wages, leaving them little wiggle room to handle unforeseen expenses. Real-time payroll solutions could benefit both parties, however, by making workers’ wages available on demand and allowing companies to hold onto their cash until payday. In this month’s Feature Story, Tom Hammond, vice president of corporate strategy and product management for payroll provider Paychex, discusses how real-time payroll could keep financial management smooth for employers and employees at a time when both sides are looking for stability, flexibility and speed.
Deep Dive: How Real-Time Payments Can Solve Consumers’ And Businesses’ Payment Hurdles
Consumers have always been inclined to seek out fast payment services, as evidenced by the fact that more and more of them are adopting P2P services during the pandemic. This trend is even influencing their perceptions of payment speed when they interact with retailers and receive funds and is rubbing off on businesses in turn. This month’s Deep Dive examines how consumers’ growing familiarity with P2P apps is pushing them — and businesses — to seek faster and more seamless payment experiences.
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