61% of Businesses Expect a Competitive Advantage With Real-Time Payments

Sixty-one percent of businesses believe that real-time payments will give them a competitive advantage.

One key reason is businesses finding their customers have come to expect faster payments — just as they experience fast and always-on capabilities in other digital interactions, according to the “Real-Time Payments Tracker®,” a PYMNTS and The Clearing House (TCH) collaboration.

“Customers expect the same behavior in financial transactions as in everything else they do when it comes to everyday services, with the key theme being instant gratification,” J.P. Morgan Head of Global Real-Time Payments Rupa Krishnan said in the report.

Unique Advantages for Different Verticals

Different sorts of businesses have found that real-time payments give them advantages that are especially important to the vertical in which they compete.

Gambling and casino businesses, for example, have found that instant payments are the method by which the greatest share of their customers would like to receive their winnings. At a time when only 58% of consumers are given a choice of disbursement method, businesses that offer the option of instant payments can gain a competitive advantage.

Convenience stores and pharmacies have been leaders in the retail category’s adoption of real-time payments because they’ve found that by removing friction from transactions, they can better compete with the growing number of independent, mobile-only online pharmacies and convenience services. For retailers of all sorts that are facing stiff competition from online foes, innovation has become mandatory.

Similarly, property management firms can improve their customer experience by offering leasees the option of real-time payments that will deliver their security deposit refund within seconds. This not only offers customers more choice and convenience when receiving refunds, but also boosts efficiency for the property manager by ensuring that disbursements are automatically reconciled in their system of record.

Growing Capabilities and Adoption

Together with faster payments, TCH’s RTP network offers payment messaging, digital commerce services and other features. These have encouraged businesses and financial institutions alike to join the network, the “Real-Time Payments Tracker®” found.

While the ability to gain a competitive advantage is the benefit mentioned by the greatest share of the businesses which were surveyed for the report, respondents also said they expect the addition of real-time payment features and capabilities to give them increased accounting efficiency (45%), reduced risk of payment failure (37%) and more transparency in payment processes (35%).

With both consumers and businesses wanting to move money instantly and enjoy these other benefits, financial institutions (FIs) are joining the RTP network. Over the last five years, both transaction volume and value on the network have averaged 10% growth per quarter.

“[The RTP network], which now offers capabilities including bill pay and request for payment, continues to show rapid growth as more financial institutions turn to real-time payments to meet customer demands,” Jim Colassano, senior vice president of RTP product development at The Clearing House, said in the report.

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