Real-Time Payments Become Corporate Cornerstone to Better Liquidity Management

The benefits of real-time payments are catching the attention of a growing number of corporate treasurers and billing and payment executives.

Helping to boost that growth is the fact that most companies that already use real-time payments plan to use them more often, according to the “Real-Time Payments Tracker,” a PYMNTS and The Clearing House (TCH) collaboration.

Get the report: Real-Time Payments Tracker

In fact, among those companies already engaged with real-time payments, nearly 75% said they expect to increase the payments they receive in real time during the next year, and 69% said they expect to make more real-time payments.

Revolutionizing Payments

These faster payments have revolutionized existing payment practices and opened the door to further advancements and new business opportunities that couldn’t exist without them.

TCH’s RTP network sits at the forefront of this sea of change, providing the means for settlement within two to three seconds at any hour of any day. This has enabled such use cases as enhanced client experience and improved liquidity management.

A survey of 100 executives from companies with $50 million to $1 billion in annual revenue shows the importance of reliability in payments and the ability of real-time payments to provide that needed assurance.

Fourteen percent of surveyed executives said the most important benefit of sending real-time payments is reducing the risk of payment failure, which is also the most-cited benefit of sending real-time payments. In addition, 7% said the same about receiving payments.

Steve Ledford, senior vice president of products and strategy at TCH, said in the report that real-time payments are helping to add confidence and certainty to the B2B payments process as an additional benefit to producing faster and more pain-free cash flow.

As companies already making use of real-time payments consider upgrades to their systems, 44% listed mitigated risk of payment failure as one of the benefits they expect from upgrading. At the same time, 18% of companies not currently using real-time payments also expect to benefit from mitigated risk of payment failure by participating in the system.

More Control

“One of the reasons that the RTP network, and instant payments in general, are a good thing for businesses to use for B2B payments is that it allows the business to have much more control over the payment process,” Ledford told PYMNTS in a December interview. “It’s not just about the speed.”

Read more: RTP Network Drives New Use Cases, Creates Value For SMBs This Holiday Season

For many organizations, the pandemic has led to a surge in supply chain disruptions that have a domino effect throughout B2B relationships, Ledford said. The ability to move money quickly — and to have both the payer and payee know exactly when that transaction occurred — can be an important value-add for businesses that need to get vendors paid quickly to minimize the risk of any supply chain disruption.

Because RTP transactions are cleared and settled in real time, Ledford added, this also takes away the credit risk associated with other methods of B2B payments.

“It’s helping to both speed up payments and create more confidence and certainty in the B2B payment process,” Ledford said.

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