Banks, FinTechs Connect Businesses To Real-Time Payments

Consumer demand, technological innovation and the evolution of the payment service provider landscape are driving faster payments adoption in the U.S., according to Fiserv Vice President of Payments Strategy and Solution Consulting Deva Annamalai.

Yet when it comes to corporate transactions, the payments landscape is full of hurdles.

“Checks are still being used by many businesses to pay employees or send funds, such as claims payments, to consumers,” Annamalai explained in PYMNTS’ latest Faster Payments Tracker.

Faster payments are far from ubiquitous, especially in the B2B landscape. But as demand continues to rise, in areas like gig worker payouts and faster payroll transactions, businesses are beginning to see significant value in faster and real-time payments capabilities.

“Faster payments are here and their potential to change the future of commerce is promising,” Annamalai said. “Competition in faster payments is good for … customers and will no doubt open doors to innovate new ideas that can raise our standards of living.”

Below, PYMNTS rounds up the latest initiatives in the B2B FinTech and FinServ spaces as service providers eye payment speed to improve businesses’ standards of operation.

Wells Loops Corporates Into Immediate Payments

Earlier this week, Wells Fargo announced an integration with the RTP (Real-Time Payments) network targeted toward its business customers.

Using an API, Wells can enable business customers to make real-time payments, an extension of the financial institution’s onboarding to the RTP network for its retail and wholesale customers last year.

In a statement, Wells Fargo Head of Treasury, Merchant and Payment Solutions Danny Peltz pointed to the benefits of the RTP rail beyond the speed of the transaction itself.

“Our customers want the ability to make immediate payments and receive timely confirmations to run their businesses more efficiently,” he said. “The ability to send transactions on the RTP network gives our customers yet another option for moving money when and how they want.”

HSBC Embraces Real-Time Corporate Transactions 

Also looping into the RTP network is HSBC, which announced the ability to connect its corporate clients to real-time payments through the integration.

It’s an extension of HSBC’s previous RTP feature for corporates, which had enabled businesses to receive real-time payments. The expansion now allows those business clients to also make payments via the RTP network.

HSBC Head of Global Liquidity and Cash Management for the United States and Canada Drew Douglas said the adoption of faster payments in the corporate payments space is being driven by digitization and eCommerce.

“As digital banking and eCommerce are embraced around the world, people expect to move money just as fast as they are able to check their account balance or buy a new app for their mobile phone,” he said.

Interestingly, HSBC has decided to introduce RTP capabilities to corporate clients first: the functionality for retail and consumer payments initiation is expected for early next year, the bank said.

Xero Accelerates Integrated Payments

As small business accounting platform Xero builds out its payments offering, the company is also focused on speed for small business transactions.

Payment service provider CreDec recently announced the integration of real-time payment capabilities from within the Xero platform (with plans to expand the integration to other small business accounting portals in the future). Through the launch of its Virtual Account, CreDec allows small businesses to bypass online banking platforms and make transactions from within Xero, then automatically reconcile that transaction data back within the accounting tool.

The integration is one of several collaborations recently announced by Xero focusing on faster small business payments. The company also announced partnerships with Stripe, GoCardless and TransferWise, also aimed at accelerating payments by reducing friction linked to manual data entry and paper.

“The U.K.’s entrepreneurs can now spend less time on financial admin and more on growing their businesses, safe in the knowledge that their bills are taken care of,” said TransferWise Head of Business Stuart Gregory in a recent statement.