The Data Point: 31% of North American Firms See 24/7 Access as Major Benefit of Real-Time Payments

In the five years since The Clearing House launched its RTP network, real-time payments have been making an ever-larger difference in speed, accuracy and security for a growing number of U.S. firms. Not yet available in Canada, firms there have an intense interest.

In “Accelerating the Time to Realized Revenue Playbook: The Real-Time Payments Edition,” a PYMNTS and Mastercard collaboration, PYMNTS surveyed 400 business leaders in the U.S. and Canada about their current real-time payments use or plans to do so this year and going forward.

Among companies currently using real-time payments, there is significant variation in how operators of different sizes incorporate this high-speed rail into their payments mix.

Finding that U.S. large-market firms (over $1 billion in revenue) use real-time payments twice as much as mid-market firms ($20 million to $1 billion in revenue), the study noted that this “adoption gap” holds back many mid-market and large-market firms “from accessing real-time payments benefits, such as enhanced reconciliation and increased transparency, but it also puts them at a disadvantage compared to their larger competitors.”

With Canadian businesses closely watching how RTP use benefits U.S. firms, the study pointed to a dawning North American real-time payments market with dynamic new money movement capabilities.

Get the study: Accelerating the Time to Realized Revenue

  • Thirty-seven percent of all U.S. businesses are currently using real-time rails to pay or receive invoice payments, and 37% of all Canadian businesses want to use them.

Use of real-time payments to shorten time to revenue is a prime benefit from the system, and more U.S. companies are seeing the payoffs. Canadian businesses are watching and learning from their U.S. counterparts as they await RTP’s arrival there.

We found U.S. firms currently using real-time payments for 6.5% of all B2B payments made and 6.1% of all the B2B payments received. It’s a meaningful single-digit figure and growing.

“Canadian firms can look to their U.S. neighbors to learn about the benefits they have reaped from adopting real-time payments,” the study stated, including better payments operations with flexibility, instant funds availability and greater remittance detail.

  • Thirty-one percent of firms believe 24/7 year-round access is a key benefit of real-time payments.

Money never sleeps, and RTP’s 24/7 year-round access is a key benefit cited by U.S. companies using the RTP rails to send and receive payments. It holds similar appeal for Canadian firms.

Per the study, “The U.S. firms that already use real-time payments have seen firsthand how they have improved security and cash flow, for example. U.S. businesses are more than twice as likely to have seen real-world improvements in both their data security and cash flow management capabilities as Canadian firms say they believe real-time payments can improve these areas.”

  • Eighty-four percent of U.S. businesses that use real-time payments say fraud is not an issue with RTP.

Some firms in the U.S. and Canada wary about real-time payments see fraudsters running wild with irrevocable payments, but that’s not the reality when we look at the data of those currently using RTP.

The study stated that “firms that use real-time payments experience every other pain point less often than Canadian firms not using real-time payments expect to experience them. This suggests that real-time payments may not bring about the operational frictions that some businesses believe they could.”

Get the study: Accelerating the Time to Realized Revenue