Real-time payments (RTP), often also referred to as instant, immediate or faster payments, is one of the hottest topics in the payments ecosystem, as both banks and merchants look to match their services to customer demand and expectations.
The rollout of an RTP infrastructure from banking and payments organisations is driving a change in attitudes across the merchant community. Our recent research study with Ovum, where we explored the payments investment choices of merchants globally, supports this perception shift, with 65% of merchants now being interested in accepting RTP - up from 57% in 2017.
Real-time customer experience benefits
While consumers certainly want fast, frictionless payment options, real-time payments can deliver more customer benefits than just the ability to transfer money instantly. RTP can offer the opportunity for consumers to streamline their physical wallets, move to mobile and take better control of their finances. 78% of merchants now believe that RTP will deliver customer experience improvements, up from 59% in 2017.
A real-time payments infrastructure can significantly improve the experience of refunds and disbursements – a continuing problem area for consumers and merchants alike, with card refunds usually taking at least a few days to process and clear. It is perhaps unsurprising that businesses in the retail and telecoms verticals – areas in which refunds can be particularly sensitive and costly – are the most positive about RTP, with 82% of retailers and 80% of telecom companies seeing the potential to leverage real-time payments to deliver enhancements for their customers.
In countries where the banking and payments infrastructure is under-supported, RTP may offer a useful additional payments option for consumers. In our survey, merchants in Asia were the most positive about real-time payments, particularly in India, Malaysia and Thailand, where more than 90% believe that RTP holds the key to improving the customer payments experience.
The RTP cost-cutting opportunity
The ability to deliver payments back to customers in real-time has advantages in several areas, not least in improving the process around reverse logistics in digital commerce, for example. RTP should also be more cost-efficient than processing refunds back through the cards networks, delivering cost savings for merchants. In addition, there is potential for merchants to reduce card acceptance costs more broadly, effectively by cutting out the middleman. RTP can also be expected to deliver operational and cost saving benefits from risk reduction, through a drop in fraud and chargebacks in online channels – a benefit which merchants across all sectors will welcome. Beyond the realm of consumer payments, merchants may also be able to use RTP to improve cash flow management, negotiate more favourable terms with suppliers and pay short-term or temporary workers more easily - a bonus that may be helpful during peak trading periods. Given all the above, it is not surprising to see that 78% of merchants now believe RTP will deliver operational cost-savings up from 57% in 2017.
Key considerations for merchants implementing RTP
It is clear from the Ovum/ACI survey that merchants increasingly recognise the many direct operational benefits they can enjoy through real-time payments, as well as the potential for RTP to unlock customer service enhancements. As RTP gathers pace around the world, merchants must ensure they have the right processing capabilities in place to take advantage of the opportunities. For some, this may involve amending development roadmaps or seeking new functionality from their payment providers, while others will need to look to their banking and/or acquiring partners to unlock the benefits.
Perceived benefits of RTP by merchantsSource: ACI Worldwide & Ovum 2018 [click-to-enlarge]
Download your free copy of the ACI and Ovum 2018 Survey on the Payments Investment Choices of Merchants Around the Globe.
This editorial was first published in our Payment Methods Report 2018 – Innovations in the Way We Pay. The Payment Methods Report 2018 presents the key trends and developments in global and regional payment methods by highlighting the innovation, challenges, and developments in the use of the most important payment methods across geographies and verticals.
About Dean Wallace
Dean is an avid emerging payments enthusiast specialising in real-time & digital payments. At ACI, Dean has held various product leadership roles covering Cards front and back-office functions, Mobile payments, Real-Time & Digital Payments and Enterprise Payments Hub solutions. Prior to ACI, Dean has held a number of roles with VocaLink, TSYS, and IBM.
About ACI Worldwide
ACI, the Universal Payments UP) company, powers electronic payments or more than 5,100 organisations around the world. More than 1,000 of the largest financial institutions and intermediaries, as well as thousands of global merchants, rely on ACI to execute USD 14 trillion each day in payments and securities. In addition, myriad organisations utilise our electronic bill presentment and payment Services. Through our comprehensive suite of software solutions delivered on customers’ premises or through ACI’s private cloud, we provide real-time, immediate payments capabilities and enable the industry’s most complete omnichannel payments experience.
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