Taking Real-Time Payment Rails To The Tipping Point

Real-time payments are imperative for running successful operations in today’s global ecosystem. Digital payments sent internationally are expected to move past $1 trillion in 2025, but getting to that point will require support from payment providers, regulators and other such firms still building out the necessary infrastructure.

Many of these providers are particularly competing for small- to medium-sized businesses (SMBs) to join their faster payments network over another, which can be tricky as more competitors enter this space. Tools that can fill specific business needs and features beyond more than just real-time speeds are beginning to grow more important, propelling development and innovation in this area.

In the latest Faster Payments Tracker®, PYMNTS examines developments in instant payments adoption around the world, and what may be holding back some FIs from investing in new systems.

Around the Faster Payments World

Countries such as Brazil are beginning to experiment further with real-time payment capabilities. The Central Bank of Brazil has announced plans to release an instant payments system, which will use QR codes for ease. The payments network will allow merchants in the country to receive funds just by having consumers scan QR codes on their cell phones. The aim of creating this system was both to provide more speed and security to the country’s merchants.

Real-time and digital payments can also be beneficial to self-employed individuals whose business takes them to different locations, such as homemade jewelry owners or artists. Financial technology provider Fiserv has devised a technology that allows individuals to accept payments on consumer-grade smartphones and other digital devices, as well as handheld business point-of-sale (POS) systems. The system lets potential buyers put their PINs into merchants’ smartphones without any additional hardware.

Faster payments are filtering into the transportation industry as well. The Metropolitan Transportation Authority (MTA) in New York City has announced plans to implement its One Metro New York (OMNY) system into subway systems in the Bronx, which will enable users to use contactless and digital payments to pay for their fares. The system will come fully online in the city by 2021, according to the MTA.

To find out more on these and other stories, visit the Tracker’s News And Trends.

Designing Real-Time Payment Rails for Ubiquity

The use of real-time payment rails could bring benefits to consumer and business transactions, but only if the systems become widely adopted. Firms will only see value in sending money over these rails if they know their intended recipients will be able to accept the payments, after all. This is why it is important to make sure banks and financial institutions of all sizes can — and want to — access the same rails, said Steve Ledford, senior vice president of product strategy and development for banking association and payments company The Clearing House (TCH). To learn more about how TCH designed its Real Time Payments network to encourage uptake, visit the Tracker’s Feature Story.

About the Tracker

The Faster Payments Tracker® is your go-to resource for staying up to date on faster payments developments and initiatives on a month-by-month basis. The Tracker highlights the contribution of different stakeholders, including institutions and technology providers coming together to make this happen.