Corporations today receive payments through a variety of methods: They might take in funds through checks, traditional automated clearing house (ACH) or wire transfers. Some corporates may accept cash, credit cards or web payments. In other words, corporates have a mix of payments coming in through different channels. Real-time payments add another payment option, however, they come with real-time challenges.
“The expectation from the customer is they want immediate credit” for their payment, DadeSystems Chief Marketing Officer Tom Berdan told PYMNTS in an interview. There is a sense of urgency around those real-time customers, Berdan says, and they might have specific reasons for making a payment through that method. In one case, they may be establishing a credit line in a new order. The customer might be using the real-time payment channel to make a payment, have the order released and receive the goods.
In another case, time may be a factor: A corporate might extend a discount to a payer if they pay within a defined number of days. (The corporate might, say, offer the customer a 1 percent discount.) With the third likely scenario, a customer might have become delinquent for whatever reason and real-time payments can give them the flexibility to get an order immediately filled. Regardless of the reason why their customers make real-time payments, billers that receive payments right away might face a posting challenge. Berdan describes the need for such a solution this way: “It creates an urgency on that biller to post those funds and make sure that they have an adequate system to be able to do that.”
To help tackle this payments challenge, FinTech firms such as DadeSystems are using technology to read data to automate the process of accepting a real-time payment and crediting the customer’s account. While Berdan says that the volume of payments in real-time is pretty small, he noted that they manifest themselves into “an ongoing problem for those corporates or billers to post those payments.”
Most of the processes today are manual and labor intensive, but FinTech firms are aiming to provide an automated solution for this challenge with the help of technology.